We used the same methodology to analyze the lease vs. finance choice for this higher-end car. Because many luxury cars depreciate more slowly, leasing appears to be an especially attractive choice, particularly when you focus only on the monthly payments. But the higher residual value makes buying even more economical since it allows the owner to build more equity sooner.

What you’ll pay	Financing	Leasing
Down payment and/or other up-front payments	$3,529	$4,494
Monthly payments	691	429
TOTAL COSTS
After 1 year	7,906*	9,642
After 2 years	13,207*	14,790
After 3 years	17,971*	19,938
After 4 years	22,097*	29,580
After 5 years	25,483*	34,728

* Less the value of the car. Note: Up-front payments do not include title, taxes, or registration. Lease and loan have interest rate or equivalent of 6.99%. Our calculations take into account the opportunity cost of 3% a year in forgone interest on the money used for purchase and down payment or lease start-up costs.