5 Cars That Are Better To Lease Than To Buy
People lease cars because the warranty is always intact, they get to upgrade to a brand-new vehicle every few years and the monthly payments are typically lower. The tradeoffs are that they have to keep an eye on the odometer and, since they’re essentially renting a car for life, they never experience the thrill of making that final monthly payment — and they don't get to eventually save money by no longer having a car payment.
However, Chase Auto advises that the most consequential long-term difference is that people who buy cars build equity with every payment — though depreciating, owned vehicles are assets that buyers can sell for cash, trade in during a future purchase or collateralize for a secured loan.
On the other hand, monthly lease payments don't cover the principal and interest like purchase financing. Instead, they cover financing costs and the vehicle's predicted depreciation. Therefore, the best vehicles to lease are often those that retain their value well over the first few years — including the following SUV, sedan, truck and sports car.
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Ford Bronco
Starting MSRP: $39,630
According to CarEdge, the average Ford Bronco retains 85.14% of its resale value over three years, presuming 12,000 miles per year, which is the norm for a standard 36-month lease. No other vehicle guards its value more jealously than Ford's recently resurrected rival to the Jeep.
Kia Optima
Starting MSRP: $27,190
The No. 2 slowest-depreciating vehicle on the CarEdge list is the GMC Savana Cargo, a specialized van mainly meant for commercial use — but just behind that is the Kia Optima, a sport sedan that clings to 83.96% of its value after three years.
Toyota Tacoma
Starting MSRP: $31,590
The No. 3 best vehicle to lease is the Toyota Tacoma. After three years, the midsize pickup truck holds onto 83.32% of its original MSRP.
Toyota Supra
Starting MSRP: $56,900
The Toyota Supra is a grand tourer and sports car lauded for its handling, performance and track-inspired design. The successor to the beloved A80 Supra, it retains 82.15% of its value over three years.
Any Vehicle With a Monthly Payment of 1% of the MSRP or Less
A vehicle's estimated residual value at the end of the lease term is one of the most significant factors in determining a lessee's monthly payment — but not the only one.
A lease calculator can help identify a fair monthly payment according to factors like:
Capitalized cost, or the vehicle's retail price
Money factor, or the financed portion of the lease based on factors like the borrower's credit
Lease term, typically between two and four years
Mileage cap
Down payment
According to LeaseGuide, a good benchmark for all leased vehicles is the 1% rule. If the monthly payment — not including sales tax and a down payment — is 1% of the vehicle's MSRP or less, it might be a good deal. For example, if you're leasing a $30,000 vehicle, a fair monthly lease payment would be $300 — but less is always better.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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