Why I’m Leasing my New Car

This blog post was written by Scotty Abramson, lead analyst on the Earnest growth marketing team and happy Metromile customer.

I work and live in San Francisco. After one awesome car-free year, I heard the call of Lake Tahoe, Big Sur, and Napa. It was time to get a car to better explore the region.


However, I grappled with whether to buy or lease a car. First I had to figure out how many miles I would be driving per year (around 10,000), the type of car that met my current needs (a sporty hatchback), and my car budget (between $200 and $300 per month). I realized a lease was probably the best fit for me. Then I became obsessed with understanding how a car lease actually works.

When you lease a car you are essentially paying the difference between the current purchase price and the price the manufacturer is willing to buy the car back for at the end of the lease. Divide that number by the length of your term, add interest, and you roughly have your payment.

After a week of intense car-lease shopping with multiple dealers, I signed a three-year contract for a VW GTI. So far, it’s been great and I love driving it. I even learned so much in the process I wrote a detailed blog about how I negotiated my lease to get the best deal.

As I this was my first time getting my own new car, I also had to get insurance. Given my expected low mileage per year, and my preference for handling transactions through my smartphone, Metromile made perfect sense for me. So far it’s been great—it was fast to get insured, it’s the right price, I can track my trips through the app.

So if you’re trying to decide between buying and leasing, it pays off to run the numbers and then negotiate every single cent. The same mindset should apply to your insurance. Happy driving!

Paying for Your New Ride: Buy or Lease?

Shopping for a new car is exciting, but figuring out how you’re going to pay for it can be downright confusing. Pay in cash? Buy or lease? It will depend on your financial situation and your lifestyle but we have some advice to help you decide.


  1. Paying in cash Very few people actually pay cash for a new car, but if you’ve been saving and don’t want the stress of monthly payments hitting your budget, paying cash can be the best option. First, paying cash means no interest costs or financing fees, which can add up. You’ll also be able to do what you want with it, and when the time comes it will be easier to sell since you hold the title. The only downside? If paying cash is a squeeze on your savings, consider leasing or financing. Cars depreciate the moment they drive off the lot!
  2. Financing This is the most common payment option and basically means you’ll make monthly payments for a set number of months. Many customers finance through the dealership, but you have the option of using a bank or credit union. You will have to make a down payment which can be 10-20% of the car’s purchase price and of course, you’ll pay interest. Aside from the financial aspects, if you plan to drive a lot or anticipate a lot of wear and tear on the car, financing is probably the best option.
  3. Leasing If you’re a low-mileage driver like most of our Metromile customers, or you like getting a new car every few years, leasing is a great option. Basically, leasing is like renting. You pay a monthly payment for a set time period which is often lower than financing a car and can have a lower down payment. Plus, leased cars are under warranty so almost all repair costs will be covered. You will be given the option to buy at the end of lease as well! The downsides? Since you’re really just renting the car you aren’t building any equity and if you go over your mileage, it can be costly.

No matter your payment choice, be sure to negotiate and compare prices! And, don’t forget, with every new car comes the need for car insurance. If you don’t drive a lot, you could save a lot with Metromile’s pay-per-mile insurance. Get a quick quote now to see how much.