Is it better to buy or lease a luxury car?
Deciding whether to lease or buy a luxury car comes down to what you value in a vehicle, how long you plan to keep it, and your budget. The calculations for leasing a luxury car differ from a standard vehicle because luxury vehicles decrease in value faster. Choosing to lease an exotic car also depends on whether you want the car to be your daily transport or a toy you take out every so often.
What does it cost to lease an exotic car?
Exotic car lease prices are based on the price you negotiate with the dealer and the car's expected value at the end of the lease. The difference between these two numbers is what's used to determine your monthly payments. The bigger the difference, the more you'll pay each month. The value that cars lose over time (depreciation) happens the fastest in the first two years. By the time most cars are five years old, they'll have lost around 40-60% of their original value. Average leases run between two to four years. Thus, the lease value is based on the car's highest deprecation period.
Luxury cars depreciate faster than other cars, which means they cost more to lease than other cars do. Resale prices are also driven down because they're status symbols, and buying used doesn't appeal to many customers in the luxury vehicle market. Learn more about car depreciation and use our lease vs. buy car calculator to calculate your monthly payments.
When you consider leasing or buying a luxury car, remember to factor in the cost of luxury car insurance. Insurance rates are generally higher for more expensive vehicles. Some luxury features like alarms, all-wheel drive, or vehicle tracking may offer you discounts similar, non-luxury vehicles don't. Learn more about the cost of luxury car insurance.
What are the mileage limits on exotic car leases?
If you're thinking about leasing an exotic or luxury car, consider how you plan to drive it. Leases typically include a mileage limit — anywhere from 7,500 to 15,000 miles a year — so if you want a supercar to regularly practice performance driving or a luxury car to make road trips more comfortable, a lease may not be a great fit. If you go over your mileage limit, you'll end up paying steep fees for the extra miles you drive, potentially negating the monthly savings of leasing vs. buying.
Many people are interested in exotic cars as high-performance toys (e.g., something to drive on weekends and special occasions). In that case, a lease may be a great fit.
What is the difference between rentals and leases for luxury cars?
With both car rentals and leases, you never own the car outright. You're paying for temporary use of the car. A long-term rental is usually limited to a period of less than a year. Short-term leases are usually defined as lasting between one and two years, and standard leases from two to four years. Luxury car rentals often have more flexibility on how many miles you can drive and less stringent eligibility requirements. Leasing usually requires credit checks and a down payment, like buying a car. Short-term leases can be less expensive than long-term rentals.
Should you buy or lease a luxury car?
If you should lease or buy a luxury car depends on your circumstances and what kind of car owner you are. If you want to keep up with the latest and greatest — as many luxury car enthusiasts do — leasing a luxury car can be a way to trade up every few years and try lots of different vehicles. If you're living somewhere for a fixed period longer than a year, leasing may be cheaper than a long-term rental and can provide a hassle-free alternative to buying.
Buying may be the way to go if you prefer to keep a vehicle for a long time and invest in building equity. Unfortunately, the high price of new luxury and exotic cars makes them inaccessible to many people who want to buy one. If that's you, you might consider a used model, benefitting from the luxury segment's increased depreciation rate and buying a well-cared-for luxury car at a much lower price than new.