Leasing Vs Financing

Sometimes it is hard to choose between leasing or purchasing a vehicle. When you choose buying, there will be higher monthly payments but the vehicle will be yours and, if you choose leasing, payments will be lower and you could have a vehicle more expensive than the one you could afford but you will have to pay forever for having a car.

Financing a car is not only paying for its price but also for the interest too, and you will have the same car forever. With leasing you can change the car often and enjoy the latest technology. That is why nowadays more people choose leasing instead of buying.

Here is a list of pros and cons of both processes. There are advantages that exist for both options. It is up to you to decide which one works best for you.

Leasing Pros

  • You can drive a new car every two or three years

  • Lower monthly payments

  • The latest technology and safety features

  • Always under warranty

  • No or little downpayment

  • Depreciation is of minimal concern

Leasing Cons

  • You can't build ownership equity

  • Mileage limitation

  • Penalty for wear tear and mileage

  • You have to pay every monthly payment until the contract expires, unless you find someone who assumes the lease

Financing Pros

  • Equity

  • Complete ownership of your car

  • Payment free after paying your loan

  • Drive your car for a long time

  • Drive the miles you want

Financing Cons

  • Down payments are common

  • Higher monthly payments

  • The vehicle depreciation starts immediately after purchase

  • You are not paying only for the price of the car but for the interest and taxes

What Financing and leasing have in common:

  • Freedom to customize your car

  • You can sell or trade in your vehicle at any time

  • Insurance considerations

  • Possible repossession¬†

Now, with this information, you can decide what option works better for you and take advantage of it.