How much does it cost to lease a car?

A lease has two parts: a small amount at signing and a monthly payment. At signing you usually cover just your first month plus a few one-time fees and taxes — a small fraction of a down payment on a bought car. Then you make a monthly payment that's typically lower than a loan on the same car. Because you only pay for the years you drive it, the total is far less cash out of pocket than buying the same car outright.

With nothing down you'll still cover your first month's payment, a couple of one-time fees to start and later return the lease, and taxes. That's usually a few hundred to a couple thousand dollars all in — a small fraction of what a down payment on a bought car would tie up. Keeping the rest of your cash free is the whole point of leasing the Downly way.

A loan pays off the whole car, so the payment is higher and the car is yours at the end. A lease only covers the part of the car you use up while you drive it, so the monthly is usually lower — you just hand the car back at the end instead of owning it. Lower monthly, more cash left in your pocket each month.

There's usually a one-time fee to start the lease, taxes on your monthly payment, and — only if you hand the car back at the end — a return fee. That's it. If you buy the car at the end instead, the return fee doesn't apply. We show every cost in plain dollars up front, so nothing is a surprise.

It lowers the monthly a little, but it doesn't lower what the car actually costs — and if the car is totaled or stolen early, that up-front cash is generally gone. Keeping your money in your own account instead of locked in the car protects you if plans change and lets it keep growing while you drive, which is why we suggest $0 down.

Two things, and both are easy to avoid: going over the yearly mileage you agreed to (a small charge per extra mile), and damage beyond normal wear. Choose a mileage allowance that fits how you really drive and take reasonable care of the car, and your end-of-lease cost is usually just the return fee — or nothing, if you buy the car.

Month to month and up front, leasing almost always keeps more cash in your pocket — lower payment, little or nothing down. Over the very long haul, keeping one bought car for many years after it's paid off can cost less in total. The honest answer depends on your car and how long you'd keep it, so the smart move is to see both paths in real numbers before you sign.