Leasing vs Buying: 10 Reasons Not to Lease a Car in 2025

When you’re shopping for a new car in 2025, you’ll likely face the age-old decision: Should I lease or should I buy? While leasing can sound like a convenient, low-cost option, it’s not always the best choice for everyone. Here are 10 reasons why leasing a car in 2025 may not be the best decision for you.

When deciding whether to lease or buy a car in 2025, many drivers are drawn to the idea of leasing due to the allure of lower monthly payments and the ability to drive a new car every few years. In fact, leasing accounts for about 30% of new car purchases in the USA, offering flexibility and less financial commitment upfront. 

However, while leasing may seem like an attractive option, it comes with several hidden downsides that can make it less favourable in the long run. From mileage limits and no equity building, to costly wear-and-tear fees and higher insurance premiums, leasing may not be the best choice for everyone. 

Buying a car, although more expensive upfront, offers long-term benefits like ownership, flexibility, and the potential to trade or sell the vehicle. 

10 reasons why leasing may not be the smartest decision

1. You don’t build equity

When you lease a car, your monthly payments don’t contribute to ownership. It’s essentially like renting, where at the end of the lease term, you hand the car back with no tangible asset in return. If you buy a car, on the other hand, each payment you make builds equity in your vehicle, and once the loan is paid off, the car is yours to keep, sell, or trade in. For those who want long-term value from their car, buying is the better option.

2. High mileage fees

Leasing often comes with strict mileage limits, typically between 10,000 and 15,000 miles per year. While this might be enough for people with a short commute or those who don’t drive frequently, it can quickly become a problem for anyone who loves road trips or has a long commute. Exceeding the mileage limit results in steep per-mile penalties, which can end up costing you a lot more than you bargained for. With buying, you have no mileage restrictions drive as much as you want without the fear of extra charges.

3. You can’t customise the car

If you’re someone who loves to add a personal touch to your car—whether that’s custom wheels, a new sound system, or a fresh paint job—leasing might not be for you. Leased cars typically come with strict restrictions on modifications, and anything that can’t be reversed could lead to costly penalties at the end of the lease. When you buy a car, however, the car is yours to do with as you please. Want to add a new exhaust system? Go for it. Customisation is a major perk of ownership.

4. You’re still paying for maintenance and repairs

Leasing might come with a warranty, but you’re still responsible for the car’s upkeep, including scheduled maintenance and repairs that go beyond the warranty coverage. Depending on your lease agreement, you might also be hit with extra charges for things like tyre replacements or routine servicing. When you buy a car, you do have the same responsibility, but once the loan is paid off, your payments stop, and you’re free to decide when and how much to spend on maintenance.

5. Limited flexibility in the long run

One of the biggest downsides of leasing is the lack of flexibility. You’re typically locked into a two to three-year contract, and breaking the lease early can result in hefty termination fees. If your life situation changes, say, you move to a new city, or your family grows, you’ll be stuck with the same car for the remainder of the lease. On the other hand, when you own a car, you can sell or trade it in at any time, offering you far more flexibility.

6. You’ll never own the car

This one might seem obvious, but it’s worth emphasising. Leasing a car means you’ll never own it, no matter how long you have it. After your lease ends, you simply return the vehicle, and that’s it. You can choose to buy the car at the end of the lease term, but the buyout price is often inflated and can be more expensive than simply buying the car outright in the first place. If you want the long-term benefit of owning an asset that retains value, buying is the way to go.

7. Potential wear and tear fees

Leased cars need to be returned in good condition, and what counts as "normal wear and tear" can vary depending on the leasing company. If your car shows signs of damage, like a few dings, scratches, or worn-out tyres, you could face extra fees when you hand the car back. These fees can be significant, and while you may feel like your car is still in decent shape, the leasing company might have a different view. With ownership, you have control over when and how you repair or maintain your car.

8. Higher insurance costs

When leasing a car, the insurance requirements tend to be more stringent than if you were to buy. Leasing companies often require comprehensive and collision coverage with lower deductibles, which typically translates into higher monthly premiums. While insurance costs can vary, buying a car often allows you to opt for a different level of coverage, potentially saving you money in the long term.

9. No opportunity to sell or trade in the car

One of the main advantages of owning a car is that, when you’re ready for something new, you can sell or trade in your car. The sale of your car can help offset the cost of your next vehicle, giving you a financial boost. When you lease, however, you’re essentially stuck in a cycle. Once your lease ends, you have to either buy the car or walk away and start a new lease, without the benefit of a trade-in.

10. Depreciation affects you even more

When you lease a car, the leasing company factors in depreciation when setting your monthly payments. This means that you’re paying for the depreciation that occurs over the course of the lease. While depreciation doesn’t directly affect you in the short term, it’s worth noting that the car’s value is steadily decreasing throughout your lease, and when you return the car, you won’t have anything to show for the money you’ve spent. On the flip side, when you buy a car, while the car will still depreciate, you can drive it for many years after paying off the loan, and potentially get some of that value back when you sell or trade it in.

Leasing vs. buying: The smarter choice

In 2025, leasing a car may still seem like an attractive option for some, particularly those who want to drive a new vehicle every few years with low monthly payments. However, as we've discussed, there are significant drawbacks to leasing, from the lack of ownership and high insurance costs to mileage restrictions and wear-and-tear fees.

If you value long-term ownership, flexibility, and the ability to modify and maintain your vehicle as you see fit, buying a car is likely the smarter choice. Yes, buying comes with higher monthly payments, but you’re building equity in the vehicle, and once your loan is paid off, you’re free from car payments altogether. Plus, you can sell or trade the car whenever you want, giving you more control over your financial future.