Given that traditional leases are generally offered for 36 months, 24-month contracts offer an alternative for shoppers looking to upgrade sooner to their next vehicle. However, although payments may look reasonable, 24-month leases can often be more expensive when it comes to monthly costs, although they might be offered with more attractive incentives.
Apart from the fact that discounts, interest rates, and residual values can differ for 24 and 36-month leases, there's also the fact that not all brands offer a shorter-term option. Some examples of mainstream brands known for having 24-month leases include Chevy, Buick, GMC, Hyundai, Kia, and others.
Here, we'll look at some factors that may help you determine whether a 24 or 36-month lease is right for you.
24 vs. 36-mo. Leases Have Different Residual Values
Shorter leases generally offer the benefit of higher residual values, something that often helps lower the cost of a lease. For example, the 2024 Buick Enclave has a 24-month residual of up to 70% depending on trim. That drops to 56% with a 36-month lease.
In the case of the 2024 Chevy Trax, the 24-month residual is 72%, compared to just 31% with a 36-month contract. One potential downside is that a higher residual value could mean a higher price for your car if you decide to buy it once your lease is up.
24 vs. 36-mo. Leases Have Different Interest Rates
The interest rate, called a money factor when it comes to leases, is often different on 24 and 36-month leases.
For example, Buick's money factor on the 2024 Enclave 1SL is 0.00375, or 9% APR. The rate on a 36-month lease is slightly better at 0.00325, or about 7.8% APR.
In the case of the Trax, you'll likely find higher rates on short leases. Chevy's 24-month APR comes out to 9.19%, versus 7.99% on a 36-month contract.
Case Study: 2024 Buick Enclave
Buick's 24-month lease on the Enaclve 1SL is currently $319 per month with $4,649 at signing, an effective cost of $513/month. That's $12,312 over the life of the lease before taxes & fees.
You also have a 36-month option at $319 per month but with $5,849 at signing. That comes out to an effective cost of $481/month or $17,316 for the life of the lease.
Here, the 24-month lease does mean spending $5,004 less over the course of the lease, but your monthly costs will be $32/month higher.
Case Study: 2024 Chevy Trax
Chevy's 24-month lease on the Trax LT is $249 per month with $3,279 at signing. That equates to an effective cost of $386 per month, or $9,264 over the life of the lease.
In contrast, the 36-month deal is also $249 per month with $3,519 at signing. Here, your effective cost comes out to $347 per month or $12,492 over the lease.
In this case, the 24-month lease will save you $3,228 over the course of the lease, but you'll be spending an extra $39/month.
24 vs. 36-mo. Lease: Which Is Better?
24-month leases may offer additional flexibility, but most shoppers will find they cost a lot more money when it comes to monthly payments. If your priority is monthly affordability and getting more for your money, you'll probably find a 36-month contract to be a smarter choice.
Most shoppers may not be aware that automakers offer "lease pull-ahead" and early turn-in offers to help get you into a new car faster than what's stated on your contract. Nuances differ for each brand, so we recommend working with your dealer to identify an option that best meets your needs.
You may find that there's a "sweet spot" when it comes to some leases. For example, cars with lower residual values are sometimes advertised with longer lease terms to make the payments easier to swallow. Consider the amount of flexibility you'd like before making a decision on which is best.
Sean Kaufman Automotive Editor
Sean is an automotive enthusiast with a background in sports journalism. He is a graduate of California Lutheran University with a Bachelor of Science in Business.
