Is it Better to Buy or Lease a Vehicle for Lower Middle-Class Families?

Most of my blog ideas come from my actual life tapping me on the shoulder, and lately, that tap has been coming from our driveway.

One of our cars is about to turn 20, which is iconic, but also a clear signal that we’re approaching the point where it needs to be replaced on our terms, not abandoned on the side of the road with a tow bill and zero trade-in value. We want this to be an asset we can still leverage, not an emergency expense we’re forced to absorb.

At the same time, this week marks two years since we bought our other car. It was only four years old when we purchased it, solid on paper, and very much expected to be a “safe” decision. And yet, the actual ownership experience has been… more expensive than expected. Enough so that as we look ahead to replacing the older car, we’re seriously reconsidering whether buying is still the move, or if leasing deserves a seat at the table this time around.

What you can learn:

Whether it’s better to lease or buy a vehicle

If leasing a car is cheaper than buying

What to expect after buying a new(ish) car

The true cost of ownership

The hidden costs of leasing a car

The total cost of leasing vs. buying over 10 years

Is It Financially Smarter to Buy, Drive Forever, Repeat?

While my husband and I have different money habits, neither of us had ever taken out a car loan. But that changed when we bought our 2020 VW Atlas Cross Sport. Here’s what the purchase looked like:

• Vehicle price: $33,882

• Extended warranty: $3,459

• Trade-in (2012 Nissan Altima): –$6,000

• Cash down payment: –$11,370

To cover the rest, we took out a $20,000 loan at 5.99% for 4 years, which will result in about $2,539 interest paid. So, before maintenance, fuel, or repairs, our total out-of-pocket will be about $39,880.

It is, objectively, the fanciest vehicle we’ve ever owned. And yet… it hasn’t been the experience we assumed came with buying a relatively new car. One of the biggest arguments for buying (especially over leasing) is that ownership is supposed to be cheaper over time. Our experience has been a little less aligned with that narrative.

Even a Fairly New Vehicle Come With Expenses

Raising kids is expensive but we know how to survive it, even at lower middle class. But the price differences between new cars and older ones are eyebrow-raising. Oil changes alone have been a surprise. For our older, basic vehicles oil changes were about $45. For this car? $200+ per oil change, because:

• We’ve been using the dealership; though we could reduce this by going elsewhere.

• The car’s computer systems require specialized handling.

The day after Christmas, the car added one more unplanned expense: a dead battery. No warning lights, no gradual decline—just a sudden this car is not going anywhere today moment. Replacing it cost $325, which isn’t catastrophic on its own, but it perfectly illustrates the larger issue. These expenses arrive when timing is worst and flexibility is lowest.

We are preparing to have to replace all four tires by the end of the summer. We estimate that each tire will be about $150, and we will need to pay for installation and a wheel alignment.

While oil changes, batteries, and tires are a normal part of car ownership, the cost jump compared to our older, simpler vehicles was another reminder that newer cars cost more upfront and more to maintain. And I’m seriously considering getting a diagnostic tool to save money long-term.

Was the Extended Warranty Worth It?

The extended warranty we added to our purchase covers 60 months or 100,000 miles, which means it will last for the entire length of our car loan and possibly another year beyond that. On paper, that alignment sounds smart: the riskiest years of ownership overlapping with the years we’re still making payments. Reality, however, has been more nuanced.

Fourteen months after buying the car, a warning from the vehicle’s computer system told us to get to a mechanic immediately. That first visit resulted in a $250 copay for a repair covered under the warranty. A week later, the same system flagged another related issue, but technically a separate repair.

This second visit wasn’t covered under the first copay, and between a new copay and an additional fee for renting a car, we paid $270 more. When I asked for an itemized bill the second time, the service advisor told me the original cost without the extended warranty would have been $860. So yes, the warranty helped a bit.

Here’s how that shakes out so far:

• Cost of extended warranty: $3,459

• Out-of-pocket repair costs paid: $520

• Original repair cost without warranty: $860

• Estimated savings from warranty use: ~$340

The value of an extended warranty depends entirely on how much each repair would have cost without coverage. But, say, it saves us roughly $400 per repair, we’d need to use it about 9 times to break even.

From a return-on-investment perspective, it would need to be used far more frequently than most people expect, and that’s assuming the savings per repair stay consistent. For a lower-middle-class family trying to minimize long-term costs, that’s a hard case to make without some very bad luck.

Does Leasing Actually Save Families Money?

The appeal of leasing isn’t about always having a shiny new car. It’s about cost containment. The main reason leasing even made it onto our planning is the kind of surprise repairs we’ve already experienced.

But Toyota’s structure adds an important constraint. The complimentary ToyotaCare plan only covers 2 years or 25,000 miles, so if we want maintenance coverage, leasing would need to happen in two-year increments, not the typical three.

And while that maintenance plan does help, it’s not comprehensive. It would cover scheduled services and faulty parts, meaning we’d likely avoid dealership-priced $200 oil changes and most early mechanical issues. However, it explicitly does not cover:

• Tires

• Brake pads (unless there’s premature failure)

• Oil changes outside the recommended schedule

• Damage from wear and tear

Another cost that increases with leasing is insurance. Leased vehicles typically require higher coverage limits, lower deductibles, and full comprehensive and collision for the entire lease term. For many families, that translates into meaningfully higher monthly premiums, and over time, it adds to the true cost of leasing.

Leasing also means:

• Mileage cap: 12,000 miles per year

• Wear and tear risk: kids, parking lots, door dings, mystery scratches

• End-of-lease exposure: potential charges or loss of security deposit

So, while leasing may protect us from surprise mechanical costs during the lease, it introduces the possibility of a delayed surprise cost at the end.

How Much Does It Cost to Lease a 2026 Toyota 4Runner

• Required down payment: $4,405

• Monthly payment: $475

• 24 months of payments: $11,400

• Total 2-year cost: $15,805

However, the Toyota site lists $5,629 due at signing, which includes the down payment, first month’s payment, and a $749 acquisition fee. And that number does not include:

• Taxes

• Title and licensing

• A “refundable” security deposit

• Other possible fees, including $1,495 for delivery, processing, and handling

So, the cash required upfront could be closer to $6,500 to $7,500, depending on location and fees.

How Leasing Compares to Buying Over 10 Years

To make this comparison realistic, we would have to lease consistently—renewing every two years to keep maintenance coverage—here’s what the math looks like over a full decade.

Using a conservative average:

• $7,000 due at signing every two years

• $12,000 in payments over those two years

That’s $19,000 per lease cycle. Over 10 years (five lease cycles), the estimated total lease cost is $95,000. And this assumes:

• No major accidents

• No excessive wear-and-tear charges

• No forfeited security deposits

• No early termination fees

So, let’s compare that to what buying our Cross Sport has, and will likely, actually cost us. Over the first four years, between maintenance and covered minor repairs, we will spend around $2,000 to $3,000.

Post-warranty, when repairs become fully out-of-pocket as well as less predictable and more likely, a conservative estimate for years 5 through 10 would be about $1,500 to $2,000 per year, or $7,500 to $10,000. Add that sum to our purchasing price, and the cost of ownership would be about $56,500.

Buying is cheaper over 10 years—by a lot. But it loads uncertainty into the later years, when the car is older and failures are more expensive. Leasing, on the other hand, spreads risk evenly and predictably, but at a premium that compounds aggressively over time.

For lower-middle-class families, the decision isn’t about which option is “better.” It’s about whether you’d rather:

• Pay less overall and accept uneven, delayed risk

• Or pay significantly more to smooth that risk into fixed monthly costs

Neither choice is wrong. But pretending they cost roughly the same is how families end up surprised and stuck.