Lease vs buy
Lease vs buy in Maryland: how to compare fairly
A low monthly payment is not the same as a low cost. Put both options on the same total-cost basis, and get the numbers in writing.
The basic difference
The FTC explains that a lease pays for the right to use a car for an agreed time and number of miles. You pay for the car's expected loss in value during the lease, plus a rent charge, taxes and fees. Monthly lease payments are usually lower than finance payments on the same car, but at the end you return the car and own nothing.
Compare total cost over the same period
| Lease | Buy |
|---|---|
| Amount due at signing | Down payment |
| Monthly payment times number of months | Monthly loan payment times number of months, or the cash price |
| Fees: acquisition, disposition, doc fee | Dealer processing fee (up to $800 in Maryland) and loan fees |
| Taxes and Maryland MVA fees due on the deal | 6.5% excise tax, $200 title fee, registration |
| Charges for extra miles or wear when you return it | Repairs after warranty ends |
| Nothing owned at the end | Minus what the car is worth at the end (a guess) |
Add up each column over the same number of years. Treat the resale value of a car you buy as an estimate, not a fact.
Maryland excise tax on a lease
The MVA says that for a leased vehicle, excise tax is 6.5%, less the monthly tax paid in your previous state. It asks for a copy of the lease contract or a letter from the leasing company showing any tax paid to a previous state. The MVA page does not say in plain terms how the tax base is set on a lease, so do not assume.
Ask the dealer to show in writing: the Maryland tax amount, what it is calculated on, whether it is paid at signing or rolled into the payments, and every other fee on the lease worksheet.
Questions to ask before you sign (FTC)
- What is the amount due at signing? If an ad says $0 due, what must you still pay before driving away (fees, taxes, deposit, first payment)?
- What is the total amount due under the lease?
- How many miles are allowed, and what is the charge per extra mile?
- What are the early termination terms?
- What happens at the end: disposition fee, wear and tear rules, and the buyout price?
- Is the price in the lease the same price you negotiated for the car?
When buying tends to fit, and when leasing does
- Buying tends to suit people who drive many miles, keep a car for years, or want to modify it.
- Leasing tends to suit people who drive a predictable number of miles and want a new car on a short cycle, and who can handle the end-of-lease charges.
- Either way, compare the total over the same years, not the monthly figure.
General information, not financial advice. Offers differ by dealer, credit and time, so get quotes in writing.
Sources
- FTC, Financing or leasing a car: https://consumer.ftc.gov/articles/financing-or-leasing-car
- FTC, Car dealer ads and promotions: https://consumer.ftc.gov/articles/car-dealer-ads-and-promotions-know-you-go
- MVA, Excise Tax: https://mva.maryland.gov/title-registration/fees-payment-options/excise-tax
- MVA bulletin, Taxable Price (April 23, 2026): https://mva.maryland.gov/your-mva-guide/businesses/bulletins-businesses/taxable-price
Checked October 15, 2026. Rules and fees change, so confirm on the source before you pay.