Lease vs purchase


Hi group, I hope this ok to ask here.

I’m currently driving a 2004 4Runner Limited and am ready to get something new. Long term, I will probably buy another Toyota or Lexus SUV because I like the reliability and maintenance costs. However, I think I’d like something different for 3 years or so, just to try something new.

I originally was looking at a CPO XC90 or Q7 or Discovery but then started to get worried about the depreciation after 3 years, paying sales tax on a $40k vehicle that I was only going to drive for a couple 3 years, and then having to deal with the headache of a private sale or trade in (not getting a good price).

So then I turned to leasing, figured if I could find something nice for a few years, I wipe my hands clean and go buy the long term car. However, I don’t seem to be having luck with getting my target price on some of the lease vehicles I’m interested in.

So just wanted to throw this out there - you guys have a lot of experience in this. Just looking for some guidance, if you were buying a vehicle for approx 3 years, would you be looking at purchasing or leasing or…?

thanks in advance!

It depends on which vehicle you want, but this is a leasing forum, so what do you think?


We lease in these parts


I guess I’m the designated purchaser :rofl: 3/4 of our vehicles are owned :laughing:

OP - the answer is DO THE MATH


I mean, I realize what kind of forum this is. But I can’t believe nobody here, with as good of a deal as everyone is trying to constantly get, has NO thoughts at all on purchasing versus leasing at all…but if that’s the case then my bad.

As far as doing the math…how do I know what my (as an example) $40k 2017 Audi Q7 would be worth in 3 years. Are you suggestions is as simple as just looking up 2014’s and adjusting for mileage to get an idea?

These would offer a VERY different ownership experience compared to your 2004 4Runner.

It depends on a lot of variables. If you want a fancier, more luxe SUV, then yeah…leasing is probably the most wise choice. It can be better value and no headaches of dealing with out of warranty repairs further down the road. If you’re looking at something like a Lexus RX or Highlander though… that becomes a little more complicated.

Ballpark yes.

And you also need to include maintenance and repair costs.

Sneak preview: owning a used Audi is a horrible idea unless you can handle all of the repairs and maintenance yourself.


We weigh the options. Some cars are split down the middle on whether more effective to lease vs buy from a depreciation standpoint. Some states are better than others due to taxes.

If looking at a BMW, you’d be an idiot to buy, even cpo. If looking at a Lexus, then probably split down the middle on lease vs buy.


Yeah, Ive heard that. Thats why i was thinking maybe a couple year old CPO car, i would be able to drive and be covered under warranty the entire 3 years of ownership.

So I just did this exercise on a cayenne. Q7 is similar. Here we go:

$40k 2017 Q7 with around 30k miles seems the norm. So we’ll consider that the sale price.

Sales tax, we’ll assume is 7% on the full price (no trade in), and we’ll assume it’ll be driven for 10k miles a year for three years. Probably will need at least one set of tires, and maybe some maintenance we’ll also assume.

$40k Sale price
$2800 race taxes
$1200 tires all around and mounted
$1k in random maintenance

Trade in for a 2014 Q7 with 60k miles is estimated to be around $17k

So total ownership cost of a Used Q7 for three years is going to be about $28k. Or an effective monthly payment of $777 if nothing major goes wrong.

Now go look around at random deals posted here and they have Q7s for way cheaper than that.

The advertised price is roughly $20-23k for the same time span, but you have a brand new car under full warranty.

So… The math on this one seems obvious to me, lease a Q7.

The math on a cayenne or benz might be different.


This is really general, and only my opinion-

Always Buy- Honda’s, Toyota’s (Except Tundra), Jeep Wrangler, Chevy Colorado, stripped/base model 1/2 tons, and all 3/4-1 Ton Trucks

Always Lease- Everything Else (if driving 15k Mileage or less a year)

The biggest gotcha, most vehicles don’t lease well or purchase well. That list would be far too long to type here.
Avoid Leases over 36 months, Avoid Odd Month Leases (39 Months, 42months, etc).


Thanks all, this helps alot.

Especially MConte05 for taking the time to do all of that. That really helps out it all into perspective. I cant believe that 40k truck goes down to 17k in 3 years. Brutal…

I learned it the hard way on a cpo Ford escape. Had an effective monthly of $550 after 36 months in taxes, depreciation and maintenance over 36 months

Now I lease a brand new BMW wagon and an x2 for less than $425 combined :laughing:

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Add another $100 a month for interest when you buy

I bought our 2018 4 Runner (and our 2017 Tundra). The math for me on getting rid of the 4 Runner now must consider the depreciation curve. You can look up the depreciation curve on any car… just type in the model and depreciation curve in to google. The first year is obviously horrible on anything. But then it gets interesting. For example, since we don’t drive the 4Runner much, it’s worth $33,000 according to my Vroom offer since it only has 10K miles on it in 20 months. But in 3 more years with hypothetically 50,000 miles on it, it should still be worth about $27,000. That seems crazy but I’m only losing $6,000 in those three years (probably less with the low mileage) and with a 4 Runner, a low chance that anything major will break. So that math would seem to point to me keeping mine rather than turning it in. OTOH, if you’re buying new, you take a 14-18 percent hit in the first year… plus taxes. You have to keep it awhile to make it worthwhile. That said, I will probably get rid of my 4 Runner soon. No one here really loves it.

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When I was doing the math on Cayennes, I was looking at $20-25k ones with like 60-80k miles.

Even if I got a good deal privately, and drove it for 3 years and 10k miles each, between taxes, estimated maintenance and depreciation at trade-in, it was going to be something stupid like $15k over 3 years assuming nothing broke, or it’d just be stuff I could fix. Effective $450-ish a month.

Instead decided to make the wife love an X2. :slight_smile:

Ok. I don’t mean to hijack the post but not only is your reply incredibly helpful to the OP but you’ve also given me an “ah-ha” moment. I’m looking to lease a Mercedes A220, CLA250, or C300 in the coming months BUT was always curious how a CPO purchase compared. This ‘Effective Monthly Payment’ formula helps a lot with that. I’ve done a workup similar to yours and had to guess on some of the numbers. Did I do this correctly?

$30k 2017 CLA250 (30,000 miles)

$30k Sales Price (2017 CLA250)
$975 Taxes (3.25%)
$1,200 Tires All Around & Mounted
$2,000 In Oil Changes/Maintenance

Trade in for a 2014 CLA250 with 75,000 miles is $13,500

Total cost of ownership is around $20,675 based on this. That gives me an effective monthly payment of $574.

I assume that means I would take that (if correct) and compare it to the deals here to see which makes more sense? Obviously I know a lot of things could raise this (one garage bill for example since it’s a German car).

How are you determining the predicted trade in value though? I calculated mine using a 5 year old vehicle (buying CPO 2 years and going back another 3 for ownership length).

These are all horrible candidates to buy. They never stop depreciating and the reliability is suspect.

Look at Lexus LX or GX instead to buy, or lease something like the above


Check out this site.
It gives you an idea how much the vehicle depreciates through the years.


I typically just go to and look up the same vehicle but 3 years older and with the extra miles on top. It’s a rough ballpark.

Now of course all of this goes out the window if you are the type to drive a car into the ground.

My father for example, has a 2011 328i that he bought cpo, low miles, former loaner back in 2012. I think got it for around like $32-34k sale price. He’s driven it just to work and back for the last 7 years, I think now has around 65k miles on it. It’s had some issues that required about $2k in maintenance, and been through 2 sets of tires, probably could use another soon. So another $2k in tires. MO sales tax is 9%, so $3k in taxes (not counting the yearly personal property tax).

He’s started to think about getting a cpo 5 series to replace it. Dealer offered him $5k for his car on trade. So that means that if he took that deal. The effective monthly for the 7 years he’s owned it is about $400 off the top of my head.

When I explained to him the actual cost of ownership in those terms, and compared it to my $215 a month 330i I’m leasing right now, and showing him that even a normal lease deal could have been cheaper in the long run with the BMW . He finally got it.

This is the guy that is extremely frugal about everything. Thought leasing was for rich idiots, has been well off and liked to splurge a little bit on a nicer car than the accord he owned for 8 years. Really opens people’s eyes when they really do look at the true cost of ownership and compare it to leasing.

In the end though, probably the best way to still drive cheaply is indeed a few year old accord or Camry and run it for 10 years… But I’d rather be dead.