Should You Buy New, Buy Used, or Lease a Car?

Why the 'lease vs buy' debate misses the point

Most lease-vs-buy calculators compare the lease against financing the same new car. The real question is: lease vs buy a 2–3 year old used car with cash or short-term financing. Once you frame it that way, leasing almost always loses by $15K–$30K over a decade.

The biggest predictor of long-term wealth isn't lease vs buy — it's how much car you choose. A $25K Toyota driven 12 years builds ~$80K more wealth than a $50K SUV swapped every 5 years, even before fuel and insurance differences.

When does buying new make sense?

Buying new is rational in three cases: you'll keep it 10+ years, you need a model that holds value exceptionally well (some Toyotas, some Hondas), or you're using it as a business asset with depreciation deductions. Otherwise, the first-owner depreciation tax is $5K–$15K of pure waste.

EVs, hybrids, and total cost of ownership

EVs typically save $1,500–$2,500/yr in fuel and maintenance but cost $5K–$15K more upfront. Federal and state credits can flip the math; battery replacement risk after 8+ years can flip it back. Run total cost over your actual ownership horizon, not the EV sticker.

How PeakWorth models the vehicle decision

PeakWorth runs each option — buy new, buy a 2–3 year-old used car, or lease on repeat — as its own scenario through a year-by-year deterministic simulation to age 95, folding in purchase price, depreciation, financing rate, fuel, insurance, and the return you'd have earned by investing the difference at ~7%.

Each scenario reports your PeakWorth (highest projected lifetime net worth) and your FI Age (the year your portfolio reaches ~25× the expenses it must cover after Social Security — roughly 20× your total annual expenses), so 'how much car can I afford?' becomes a dated, dollar-and-year answer instead of a monthly-payment gut check.