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Leasing is renting depreciation. Here is the receipt.
The lease pitch is always the lower monthly payment. This calculator runs the honest version over the lease term: total outlay on both sides, minus the equity you still own if you buy, plus the money factor converted to a real APR — because MF 0.00167 is 4% and dealers quote it precisely because it looks small.
Anyone handed a lease offer uses it to convert the money factor to a real APR and see the outlay-minus-equity comparison. The month-after-the-lease row is the argument that settles it.
Over a single 3-year horizon, leasing sometimes costs less in pure outlay — you are only paying for the steepest depreciation years. The trap is the day after: the leaseholder owns nothing and starts over at full price, while the buyer's payments end at month 60 and the car keeps going. Over 6+ years buying almost always wins by thousands.
Multiply by 2400. A money factor of 0.00167 is a 4.0% APR; 0.00250 is 6%. Dealers quote the tiny decimal because it feels trivial — always convert before signing, and negotiate it exactly like an interest rate. Anything above the current prime-ish rates is markup.
Mileage overage fees (typically 15–30¢ per mile past 10–12K/year), wear-and-tear charges, and disposition fees at lease end — all of which push real lease costs above the advertised payment. On the buy side, maintenance rises after warranty. If you drive over 12,000 miles a year, leasing's fine print usually ends the debate.
People who genuinely want a new car every 3 years and would trade in anyway (leasing just structures that habit), and business owners who can deduct lease payments. For everyone else, buying a slightly older car and keeping it past the loan is the wealth move.