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If you've browsed a car lot or website lately, you know that driving home in a fresh set of wheels is a massive financial undertaking.

Between lingering inflation and manufacturers making fewer budget models, the average new car sells for almost $50,000, roughly $10,000 more than before COVID. Buyers are borrowing so much money that the average monthly loan payment is now a record $777, with one in five buyers committing to at least $1,000 a month, according to Edmunds, an online car shopping guide.

Numbers like these raise the stakes for shoppers deciding whether to buy or lease.

Buying is often considered the optimal move because you're building equity in a vehicle you can eventually trade in or sell. (Think renting versus buying a house.) But with prices as high as they are, buyers are either straining their budgets or stretching their car loans to seven or eight years to lower their monthly payments. More borrowers are falling behind or end up owing more than the car is worth.

Leasing, on the other hand, is generally more affordable — both in terms of upfront costs (there may not be any) and the size of the monthly payments. (Leasing payments can be 25%–40% less, according to CarSaver, an online platform for dealerships.) But at the end of two or three years, you have to return the car with little to show for it.

So what?

It's tempting to pick the option that makes things most affordable right now. And if peace of mind and avoiding hassles is most important, leasing can be an attractive option.

But there are other factors to consider, including how new you want or need your car to be. According to Consumer Reports, if you plan to keep your vehicle for at least six years, buying is still almost always the best choice. Before you sign anything, use an online calculator like this one to compare your total cost of ownership.

Here is what else you'll want to weigh:

The case for buying:

•   You get to keep the car: Though costs are usually higher, the money you put into the car is an investment. And once you pay off the car, your monthly bill goes away. With a lease, you're always making payments.

•   No mileage restrictions: You can drive as much as you want without having to monitor the odometer. With a lease, on the other hand, you'll generally have an annual mileage limit — usually between 10,000 and 15,000 miles — and pay extra for going over it. That said, this may be less of a downside if you work from home, Consumer Reports points out.

•   You're in the driver's seat: If you want to customize, detail, or trick out your car, you can. You're not on the hook for fixing dings or dents unless you want to be, and there may be more flexibility getting insurance.

The case for leasing:

•   Lower monthly payments and less down: Leasing tends to come with lower payments and a lower upfront cost (though choosing a lease deal with no money down at all can undercut that lower payment advantage). In the first quarter of this year, monthly payments averaged $619 for new car shoppers choosing a lease and $770 for those financing a purchase, according to data from the credit bureau Experian.

•   Less commitment: Leases are usually 24 to 36 months, so you always feel like you're driving a new car. And when you finance a purchase over seven or eight years, you increase the risk of eventually owing more than the car is worth.

•   Less maintenance: Other than recommended maintenance like an oil change, a leased vehicle is less likely to need major repairs that aren't covered by a warranty.

Related Reading

Survey: Car Ownership Hits Affordability Limit; Nearly 4 in 10 Americans Say It's a Financial Stretch (LendingTree)

How to Negotiate Car Prices (Edmunds)

Buying vs Leasing a Car: The “New” Reality in 2026 (Humphrey Yang)

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