Lease if: driving <12K miles/year, want new car every 3 years, prioritize lower monthly payment ($200-400/month lease vs $400-700/month loan), don't want maintenance hassle (lease covers warranty period).

Buy if: driving >15K miles/year, keeping car 6+ years, building equity, avoiding mileage penalties ($0.15-0.30/mile), total cost matters more than monthly (10-year ownership = $25K-35K vs 3 leases = $40K-50K). 3-year example: $35K car, lease $350/month × 36 months = $12,600 + $3K down + $500 fees = $16,100 total (no equity).

Buy: $500/month × 36 = $18K + $5K down = $23K paid, own $18K car (75% paid off).

Lease cheaper short-term, buying builds equity long-term.

LEASE HIDDEN COSTS: (1) Mileage overage $0.15-0.30/mile (12K limit common, drive 15K = $450-900/year penalty), (2) Wear-and-tear fees $500-1,500 lease-end (dents, stains, tire tread <4/32"), (3) Disposition fee $350-500 when returning, (4) Acquisition fee $595-895 upfront (not always disclosed), (5) Higher insurance 10-20% (lessors require comprehensive/collision), (6) Early termination $1K-5K+ (average $3,500 if exit 18 months early).

TOTAL HIDDEN: $2K-8K over 3 years.

BUY HIDDEN COSTS: (1) Maintenance years 4-10: $1,200-2,500/year (tires $800, brakes $600, repairs), (2) Depreciation 60-70% first 5 years ($35K car = $12K value year 5), (3) Higher down payment $5K-10K vs lease $2K-3K (opportunity cost 7% return = $350-700/year), (4) Loan interest $3K-8K total depending on rate/term.

Factor all costs: 3-year lease $18K-22K total, 3-year buy+sell $8K-12K net (after selling car), 10-year buy $30K-40K total (includes all maintenance).