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The claim “leasing always costs less than buying” is a misconception. Leasing often produces lower headline monthly payments because you finance only the car’s estimated depreciation during the lease, plus fees and interest — you’re essentially renting the car for a set period. But leases carry built-in restrictions and potential extra costs: mileage limits that trigger per-mile penalties if exceeded, wear-and-tear charges at lease-end, and no residual asset for you at the end of the term. Buying a car typically requires higher monthly payments if financed but results in an owned asset you can sell or keep without continued monthly payments once the loan is repaid. Thus, the long-run economics can favor buying if you keep the car beyond the loan term.

Which option fits depends on usage and preferences. If you prefer a new car every few years, don’t drive excessive miles, and value predictable short-term payments, leasing may be attractive despite lacking equity. If you drive a lot, want to minimize long-term cost, or plan to keep the car for many years, buying is often more cost-effective because you stop making payments eventually and benefit from the residual value. Compare total cost across realistic timelines (include fees, likely mileage, expected resale values, and insurance differences). Also consider tax or business implications (leases sometimes have business-usage benefits) and non-financial factors like convenience and access to newer safety tech.

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