The Truth Behind Leasing vs Buying A New Car.

It's 2026 and yet one of the most common questions I get as an auto broker involves whether someone should lease or buy their next car. The answer is... Wait. First, we need to take a look at key questions and context relating to your situation. Then we will compare the numbers involved in a lease and purchase, and finally we can make a sound decision.

What is Leasing and how does it work?

A car lease is simply an opportunity to drive a brand new car for a couple years while maintaining flexibility in your options. You do not own the car in that duration, but you're responsible for it. Think of an in-between of renting and owning.

There are many benefits of leasing a new car along with some restrictions, which I will explain below.

Leasing Pros:

1. Lower monthly payment - you drive the same new car, but pay less in a monthly payment.

2. Building credit history while carrying a smaller loan balance.

3. Easier business expensing for business use leases. (writing off the monthly payment and other expenses such as DMV fees, fuel, maintenance, etc.)

4. Maintaining flexibility in the sense that you can still buy in the end, trade/sell, or return it back at the end of the term.

5. Resale protection in the form of an accident/damage reported to the Carfax history. For example, someone backs into your car and you get it fixed with insurance, now the car carries an accident report. Well, the bank takes the loss on that resale value, not you!

6. Life changes - maybe your sport sedan is great now, but in a couple years you need an SUV.

Leasing Cons:

1. Mileage restrictions - If you go over miles allowed in your lease agreement, you will be subject to a penalty per excess mile. This varies from one bank to another, but the average is about .20 to .30 cents per extra mile.

2. Modification - If you like to modify your car, just know it needs to be returned back to stock at the time of lease return, if you choose that option. Window tint is allowed, but modifying the engine, wheels, or suspension for example may be an issue if not brought back to original condition.

3. Non-Ownership. This is a real concern based on the fact you do not own the car and will never achieve a "paid off" vehicle.

It's important to forget the old-school mentality of something always being right or wrong. I can give you 2 scenarios in leasing vs buying a new car:

Example 1: I need a new car but I can't decide on what I really want now. I just need something reliable with a low payment. I do enjoy new tech features such as wireless apple carplay and don't want any long-term commitment right now. (Yes you should lease)

Example 2: I need a new car as my old one is starting to have some issues. I love the reliability and safety of my old car. I don't really care for the new features as long as I have the basics to get from point A to point B. I will run this new car until the wheels fall off! (No you should not lease)

It has nothing to do with leasing as a concept, but better understand what is YOUR situation? What are your objectives of this new car? Now, for the most part every brand offers a lease special on at least a few models, but the final aspect comes down to whether the exact model you want makes sense to lease or buy. For example, certain brands and models are not very keen on their product being a lease, so regardless that situation may conclude to a certain answer based on the numbers of that vehicle.

My family always recommends buying a car!

Buying a new car is becoming expensive but if you know this purchase will be something you keep for 8+ years, then it makes sense. Why 8+ years? Well, the average finance term is typically 72 months, meaning if you're going to carry a monthly payment for that long, you need at least a few years of the car being paid off to really reap the benefit of "owning a car". I've seen many situations where people switch cars right when the car is about to be paid off... then the cycle restarts.

Purchasing Pros:

1. You own the car - or until it's paid off at least. You can do whatever you want with it!

2. Long-term savings - when it comes time to sell and assuming it's paid off, you have something to use as equity for the next one.

3. No car payment assuming it's paid in full

Purchasing Cons:

1. Higher monthly payment if financing OR large sum paid upfront if purchasing in full.

2. Higher loan balance if financing - this comes into play in the next situation which requires a loan.

3. You pay sales tax on the entire purchase price immediately. (Based on California)

4. You pay a higher interest amount overall. Not only did you just add full sales tax on top of the purchase price of the car, now you're paying interest on all of it.

5. If your car is involved in an accident or damage report, you take a bigger hit on the resale value of that car regardless of how small or large it really was. A bad history report can be a small scratch that was repaired professionally or a total loss.

6. Longer commitment to one car that will likely become outdated in design, tech, safety, and efficiency well before you see the complete benefit of the purchase.

7. Don't get me started on warranty. But let's toss that out the window in the first 3-4 years...

There's nothing wrong with buying a new car, it can make a lot of sense for some and not so much for others. The question is, what's your context?

I've made my decision on leasing vs buying a new car.

The truth is there is no immediate right or wrong answer. It can be a lease for you and a purchase for me, because we each have our own path and the tools of how we go about it depends on what makes sense for each of us. This is why I started South Coast Auto Brokers, where I can truly help car-shoppers make decisions that make sense for them.

There are many factors that go into such a personal decision itself and it only becomes more complex when we get into numbers for each brand. But you don't have to do it on your own, we understand the situation and advise accordingly. Your New Car is Here!

2026 Lexus GX550 - Purchase

About Me

My name is Rudy Aljabban and I am the founder of South Coast Auto Brokers. After spending years working in the dealer-side of the industry, I decided it was time to create a more efficient way of helping car-shoppers not only get the deal, but make the right decision. I value long-term relationships with my clients at SOCO and I always advise for the best outcome possible regardless of the situation. As of the time I write this, my current favorite is a 2023 Porsche 911!