Jean Chatzky has consistently favored buying over leasing a car. She says it worked for her because she commuted long distances and exceeded typical lease mileage, according to TheStreet.
But times have changed. On a recent episode of her Everyday Wealth podcast, Chatzky noted that remote work has shifted how people drive, and that may tip the scales in favor of leasing.
In a market shaped by rising rates, new tariffs, and fast-changing technology, Chatzky and her guest, wealth planner Andy Smith, offer a new way to weigh your options.
Why today’s car market makes leasing worth a look
According to TheStreet, Smith notes that leasing can reduce the amount of sales tax you pay. Since you’re only paying for the car’s value during the lease term, not its full purchase price, the tax is often calculated on a smaller amount.
Leasing also tends to come with lower monthly payments than buying, which may help drivers stay within budget, especially as interest rates remain high.
In contrast, buying usually means paying sales tax on the full price of the vehicle, which can increase your total upfront cost.
Costly leasing mistakes to avoid
Leasing can offer lower monthly payments, but missteps in the process may lead to costly surprises.
According to TheStreet, Smith warns against making a capitalized cost reduction. This large upfront payment lowers your monthly bill, but if the car is totaled early, that money is typically lost.
Another common mistake is skipping gap insurance. Without it, you could owe thousands if the car’s market value is lower than the residual value at lease-end.
Smith also advises against leasing beyond the car’s warranty period, since out-of-pocket repair costs can erase the financial benefits.
Building your decision framework
Chatzky observes that remote work has changed how much people drive, making leasing more appealing for some who previously would have ruled it out.
According to TheStreet, Smith says the right choice depends on your habits. If you prefer driving a new car every few years, maintain a mileage of under 15,000 annually, and stay within warranty coverage, leasing may be the best option.
Buying is often a smarter choice if you plan to keep the car long-term or typically drive more than the average person. Financing usually means higher monthly payments, but you own the vehicle outright once the loan is paid off, with no mileage or return conditions.
How remote work can tip the balance
Remote work doesn’t just cut down mileage, it can also reduce wear and tear on your vehicle. That may make it easier to avoid lease-end penalties for excess use or damage.
Driving less might even leave you under the mileage limit, which in some cases could result in a higher trade-in value at the end of your lease.
These shifts help explain why leasing is back on the table for drivers who once assumed they’d be better off buying.
How to choose with confidence
Chatzky and Smith both emphasize that the right choice depends on your situation.
According to TheStreet, Smith advises drivers to start with the basics: how much you drive, how long you plan to keep the car, and whether you prefer to change vehicles frequently or stick with one long term.
Look beyond the monthly payment. Insurance is often more expensive on leased vehicles. While leases typically include warranty coverage for major repairs, buyers may need to pay extra for extended protection.
Also consider the opportunity cost of tying up cash in a down payment. Whether you lease or buy, calculate the total cost, including depreciation, insurance, and long-term use, to make a decision that fits both your budget and your lifestyle.
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