Lease if you want a new car every 3 years, drive under 12,000 miles/year, and prefer lower payments.
Buy if you keep cars 5+ years, drive more miles, or want to build equity.
Leasing
- โ Lower monthly payments
- โ New car every 2-3 years
- โ Always under warranty
- โ No selling hassle at end
- โ No equity built
- โ Mileage limits (10k-15k/year)
- โ Can't buy at end (Tesla only)
- โ Wear and tear charges
Buying
- โ Build equity over time
- โ No mileage limits
- โ Can sell anytime
- โ Own the car at end
- โ Higher monthly payments
- โ Responsible for repairs after warranty
- โ Depreciation risk
- โ Larger down payment typically
Total Cost Comparison: Model 3 RWD
Here's the real numbers for a 2026 Model 3 RWD over 36 months (the most common lease term).
| Cost Component | Lease (36 mo) | Finance (36 mo) | Notes |
|---|---|---|---|
| Down payment / Due at signing | $4,145 | $4,500 (10%) | Finance assumes 10% down |
| Monthly payment | $564 (all-in) | $748 (5.04% APR) | Finance at same rate as lease |
| Total payments (36 mo) | $20,304 | $26,928 | Before down payment |
| Total out-of-pocket | $24,449 | $31,428 | Down + payments |
| Estimated value after 36 mo | $0 (return car) | $25,000 | Estimated resale value |
| Net cost after 36 mo | $24,449 | $6,428 | Out-of-pocket minus equity |
The finance net cost assumes you sell the car after 36 months. If you keep it longer, the cost per year drops significantly. The lease gives you nothing at the end.
Scenarios: When Leasing Wins
Plus you avoid depreciation risk. If values drop, you walk away.
With leasing, you know exactly what you'll pay and there's no guessing about resale value.
Scenarios: When Buying Wins
The Tesla-Specific Factors
1. No Lease Buyout Option
This is the biggest difference. With any other car, you could lease and then buy if you love it. With Tesla, you cannot. You're forced to return it, even if it's worth more.
2. Higher Money Factors
Tesla's lease rates (money factors) are often higher than finance rates for well-qualified buyers. Currently, lease APR is ~5.04% vs finance APR as low as 3.99% from credit unions.
3. Residual Values Are Strong
Tesla vehicles hold value well, which helps both lessees (lower payments) and buyers (more equity). But with no buyout, lessees don't benefit from this.
4. $7,500 Tax Credit
For leases, Tesla captures the $7,500 tax credit and often uses it to lower your payment. For purchases, you may qualify directly if you meet income limits. This changes the math significantly.
Run Your Own Numbers
Every situation is different. Use our calculator with your exact down payment, term, and mileage.
Tesla Lease Calculator โDecision Matrix: Which One Are You?
โ Lease if you...
- Want a new car every 2-3 years
- Drive under 12,000 miles/year
- Prefer lower monthly payments
- Don't want to deal with selling
- Want to write off payments for business
- Like having the latest tech/features
โ Buy if you...
- Keep cars 5+ years
- Drive more than 15,000 miles/year
- Want to build equity
- Plan to modify or customize
- Want the option to sell anytime
- Are concerned about mileage penalties
Model-by-Model Comparison
| Model | Lease (36mo, all-in) | Finance (36mo, 10% down) | Break-even miles/year |
|---|---|---|---|
| Model 3 RWD | $564/mo | $748/mo | ~12,500 |
| Model Y RWD | $624/mo | $845/mo | ~12,000 |
| Model S Dual Motor | $1,757/mo | $1,890/mo | ~10,000 |
| Model X Dual Motor | $1,850/mo | $1,980/mo | ~10,500 |
Frequently Asked Questions
It depends on your driving habits and how long you keep cars. For low-mileage drivers who want a new car every 3 years, lease. For high-mileage or long-term owners, buy.
Tesla leases have higher money factors than traditional loans, plus you lose the tax credit benefit and can't buy at end. The advertised price also excludes taxes and fees.
No. Tesla leases have no purchase option. You must return the vehicle. Learn more โ
For Model 3 RWD over 36 months: Lease total ~$24,449 with no equity. Finance total ~$31,428 out-of-pocket but with ~$25,000 equity, net cost ~$6,428.
Yes, Tesla typically captures the credit and uses it to lower your lease payment. For purchases, you may qualify directly if you meet income limits.
You pay $0.25 per mile at lease end. This can add up quickly โ 5,000 extra miles = $1,250.
Sources: Tesla lease offers April 2026, Tesla financing rates, community-reported deals. Calculations assume Tier 1 credit (720+), 10% down for finance, and estimated resale values based on current market trends.