Lease or Buy? What Actually Changed in 2026
If you last shopped for a car a few years ago, the math has shifted under your feet. Loan payments have hit a record high, lease deals look more competitive than ever, and one of the biggest reasons people leaned toward leasing EVs quietly disappeared last fall. Here’s what’s actually different this year.
The headline number: car payments just hit a record
The average new-car loan payment reached $770 a month in 2026 — the highest it’s ever been. Compare that to the average new-car lease payment of $619 a month, and leasing starts to look pretty attractive on paper. Average used-car payments sit lower still, around $531 a month, if a used vehicle is on the table for you.
Loan terms have stretched to match. The average new-car loan now runs just under 70 months — nearly six years — and more than a third of new-car loans stretch even longer than that. A longer loan lowers your monthly payment, but it also means you’ll likely be making payments on a car that’s already losing value fast, and you’re paying more total interest along the way.
Interest rates aren’t doing anyone favors right now
New-car loans are averaging around 6.4% this year, and used-car loans are running notably higher, often well above 11%. If your credit isn’t in great shape, those used-car rates in particular can make financing expensive fast — which is exactly why we put together a guide on protecting your credit while shopping for financing.
The EV tax credit trick is gone
For a while, leasing an EV had a quiet advantage: a federal tax credit that was hard to qualify for on a purchase could often be captured more easily through a lease, thanks to how commercial vehicle credits worked. That workaround effectively disappeared when the federal EV tax credit expired in September 2025. If you’re cross-shopping an EV this year, compare the lease and the loan on their own merits — not on a tax break that no longer applies.
The lease math trick almost nobody checks
Here’s one most buyers miss: lease contracts don’t quote an interest rate — they quote something called a “money factor,” a small decimal like 0.00292. To see what that actually translates to as an interest rate, multiply it by 2,400. A money factor of 0.00292 works out to roughly 7% — which might be higher than the loan rate you could get on the same car. Dealers rarely volunteer this conversion, so it’s worth doing the math yourself before assuming a lease is automatically the cheaper financing option.
So which one actually makes sense?
It still comes down to the same fundamentals we laid out on our lease vs. buy comparison: how many miles you drive, how long you keep vehicles, and whether it’s for personal or business use. What’s changed in 2026 is the backdrop — record loan payments, a vanished EV tax trick, and lease deals that need their own math check before you trust the sticker number.
Have a specific lease offer or loan quote you want a second opinion on? Reach out — happy to help you run the numbers.