A lease payment is based on the difference between the agreed upon sale price and the residual value of the vehicle at the end of the agreed upon lease period, plus taxes and interest. The residual value is used to determine the vehicles worth at lease end and is the amount the dealer would ask you to pay to keep the vehicle - which you have the right to do. A lease payment is nearly always less than any kind of finance unless the finance is spread over a much longer period of time. A lease is a good idea for people who like new cars frequently or do not want to have any maintenance expenses over, say a three-year period. Also, as the worlds used car market it hot right now due to lack of supply chain issues and computer chips, people can actually turn a profit at the end of the lease as the residual value can now be much less than the used car sale price. In these situations dealers will try to buy you out of the lease early - or maybe offer you a new deal on a new lease which seems to be too good to be true. You should check the used values to determine if it makes sense to purchase at the end of the lease and then immediately sell for a profit, or flip the same back to the dealer using the equity you now have. Regardless, you always have the option to purchase at the end of the lease (it's contractual), and usually the payments are always less for more vehicle over the same measured period than a purchase.