When Leasing Actually Makes Sense
Almost never. But almost never is not never. The specific math that makes a lease the right answer.
I am generally anti-lease. You are financing the most expensive portion of a vehicle's depreciation — the first three years — with no equity at the end. But almost always worse is not always worse.
Situation 1: Business use with full deductibility
If you are self-employed and the vehicle is used exclusively for business, lease payments are fully deductible. On a $600/month lease at a 32% marginal rate, the federal deduction saves $2,304 per year.
Situation 2: Technology transition vehicles
You believe the vehicle technology is changing rapidly and you do not want to be locked into a 5-year ownership cycle. This argument was strong for EVs in 2019-2022 when range was improving dramatically every model year. It is weaker now.
Situation 3: Low mileage, pristine condition
Under 10,000 miles per year and keep vehicles in pristine condition. Most people who lease do not drive under 10,000 miles. Excess mileage fees are $0.15-0.25 per mile and destroy the math quickly.
The one thing that makes every lease worse
Acquisition fees ($650-900), disposition fees ($300-500 at turn-in), and wear-and-tear charges assessed subjectively at turn-in. These add $60-100 per month to the effective cost. They never appear in the calculator comparison. They always appear on the final settlement.