How Much Does It Cost to Lease a Car?

By Nancy Dunham

November 30, 2019

Car with price tag illustration — Cars.com illustration by Paul Dolan

Those in the market for new cars face a barrage of buying and leasing options, which makes pricing very confusing. You probably realize there’s no one answer on how much it costs to lease a car. The answer depends on many variables including the type of car, car options, the length of the lease, market demand and your personal credit history. Still, there are some guideposts you should consider when weighing leasing versus buying.

To understand the dollars and cents of leasing versus buying, let’s consider the cost of leasing versus buying a 2019 Honda CR-V LX without options. That’s a popular car that tends to hold its value. Again, there are many variables that would impact this deal, but this example shows the money breakdown not including taxes, tags and standard fees. (Also, these examples are for those with strong credit histories.)

How Much Does It Cost to Buy?

You can purchase a 2019 Honda CR-V LX for $25,545, including destination charge.

If you pay cash, that would be the price. And if you finance at 4.5% interest for 36 months with a down payment of $2,699, the total cost is $27,165, so monthly payments equal $680 per month. When the final payment is made, the car is yours to sell, trade or use — at a lower value after three years of depreciation, of course.

2019 Honda CR-V Specs & Reviews Find a 2019 Honda CR-V Near You

How Much Does It Cost to Lease?

Remember, you are not paying to buy the car at the full purchase price. Instead, you pay for the depreciation of the car during the time of the lease — 36 months, 48 months, etc. At the time of this writing, Honda offers a 36-month lease deal on the CR-V LX at $249 a month for 36 months with $2,699 due at signing. That brings the lease price to $11,663 ($2,699 plus $8,964 in monthly payments). Many people believe that’s the total cost of the lease, but that’s not true. There are many additional costs when you lease a car. You may need to carry more insurance than you normally would (gap insurance) if it’s not already included in the lease as it sometimes is.

Putting the insurance question aside, some of the standard fees due at the end of the lease include:

A fee to turn in the car. That can be $400 or more.
Extra mileage charges. Drivers of leased cars can pay up to 25 cents per mile after the number of agreed-upon miles is reached; in our Honda example, it’s 12,000 miles per year and 20 cents a mile thereafter.
Wear-and-tear expenses. What you consider normal damage — a dent here, a scratch there — can cost you major money when you turn in the car. Again, all leases are different, but take a look at GM’s breakdown of what they consider normal and excessive wear and tear.

Let’s say the lease holder drove a modest 2,000 miles over the maximum allowable (at 25 cents per mile, that equals a $500 charge). The lease holder is also charged a modest $1,000 for wear and tear. You may be offered a deal to buy the car, and in most cases you have no equity in the car; that means the car is worth the same or less than originally estimated when the lease began. For example, the Honda CR-V lease deal includes an option to buy at the end of the 36-month lease for $14,305.20.

Yes, lease deals look great at first blush and they make financial sense for some drivers. But it’s wise to analyze the available deals, your lifestyle and your personal finances to decide if a lease or a purchase is right for you.

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