How Much Does It Cost to Lease a Car in 2024?

The price to lease a car varies depending on the make and model of the vehicle that you select, and it includes the expected depreciation of the car over the lease term, rent, taxes, and other fees.

A car lease is basically a rental agreement that allows you to drive the vehicle for a predetermined amount of miles and years. Due to the fact that you are only paying for depreciation and not the entire cost of the vehicle, lease payments for the same make and model may be less than loan installments.

However, leases can have significant fees, and after the lease expires, you no longer own the vehicle. Here's what you can expect to pay, how your payments are calculated, and what kinds of fees are associated with leases before deciding whether one is the correct choice for you.

And if you're looking for another option that's straight forwarded with no hidden fees, consider a FINN car subscription. With just one monthly fee, you get insurance, maintenance, and roadside assistance included. 

Do you want a brand-new vehicle every three to four years? If so, leasing might be a more affordable option than buying. Experian estimates that 26% of new cars are leased as opposed to bought.

But how much does it cost to lease a car? The average monthly lease payment is $506, although there are other expenses. Here's everything you need to know about leases and what to budget for if you're considering leasing a new car.

1. Down payments – Most dealerships will want you to make a down payment, and these can vary based on the type of car, location, and any promotions. Typically, they range from as little as $0 but may be upwards of several thousand dollars.
2. Monthly cost – The fee you pay to use the car is included in your monthly payment. Payments are calculated using the car's value and the expected depreciation over the course of your lease. Making a greater down payment or trading in a car can lower the monthly cost.
3. Cost to acquire – Most dealers will charge an acquisition fee, often known as a bank fee or an administrative cost. It typically costs between $395 and $895 and is intended to cover the dealer's paperwork and associated expenses.
4. Interest rates – The money factor is the lease's interest rate expressed in decimal form. Your rate will be determined by dealers based on your credit score. The money factor rate should be lower the better your credit is.
5. Returning the vehicle – The return fee comes at the end of your lease when you bring the vehicle back to the dealership. It's wise to clean and make any minor repairs to the vehicle to prepare it for sale. The return fee usually costs about $350.
6. Mileage – Leasing agreements often have yearly mileage caps of 12,000 to 15,000 miles. You will be charged extra mileage fees if you exceed this limit, typically around 10 cents to 25 cents a mile. You really need to watch this, as the cost can soon mount up if you go way over your limit.
7. Minor damages – While some wear and tear is expected, you will be charged for serious damage. The dealer may impose additional charges if you return the car with, scratches, stains on the upholstery, damaged tires, or if you ignored maintenance. You may be charged for the full price of repairs, so make you’re careful.

All of these factors need to be carefully considered before committing to a lease – it’s never as simple as just a one-off payment covers all (well, not with leasing anyway.) Don’t be afraid to shop around for the best offer available either! Dealers will work with you to try and find a solution for all – they want the sale to happen as much as you do.

Drive a new car

You can typically drive a newer car than you might otherwise afford if you lease rather than buy. Also, you can benefit from all the latest tech and security features which may be useful if you have a family.

Less maintenance

Leased vehicles are often brand-new, so you're unlikely to need expensive repairs; only normal maintenance, like oil changes. Your lease period will most likely expire before the vehicle requires substantial repairs or new tires.

Lower payments

Generally speaking, your payments will be lower than they would be if you had taken out a car loan to pay for the same vehicle. According to Experian, the typical monthly payment for a car that is financed is $617, which is $111 more than the typical monthly payment for a car that is leased.

So leasing may seem like an attractive option when compared with financing or buying a car outright. But again, this varies depending on your personal circumstances, and you should always shop around for the right deal for you.

So leasing may be a good option for some, but you need to carefully consider the points above and make sure it's truly right for you. The hidden costs can catch some people out, like the extra mileage and return fees, coupled with any damages that can set you back several thousand if you’re not careful. For those who prefer transparency, or perhaps prefer the idea of a ‘one-payment-covers-all’ type of setup – consider a car subscription model.

A car subscription may be more favorably given you know exactly what to expect. You make one monthly payment for the vehicle, and this includes all maintenance, no down payment, and even comes with free delivery to your doorstep.

You get access to the latest cars, however, unlike leasing, FINN offers short-term contracts ranging from six to 24 months. Explore FINN's cars to find out more.