Leasing vs Financing
Leasing vs. Financing: Which Option Is Right for You?
1. Understanding the Core Difference
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Leasing functions as a long‑term rental agreement, typically lasting 2 to 4 years. During this period, you make monthly payments based on the vehicle’s projected depreciation, as determined by the lender. Lease pricing varies depending on the make, model, and financial institution offering the terms.
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Financing involves purchasing the vehicle through an auto loan. You make monthly payments toward the car's full value, and once the loan is paid in full, you own the vehicle outright.
Finance
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​You own it after the final payment
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Higher monthly payments (Covers the full car value)
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Down payment requirements are usually the same. Based on the borrowers’ auto history and creditworthiness.
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Unlimited miles
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Customization - You can modify however you like
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Maintenance - Your responsibility after warranty ends
Leasing
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The bank owns it, you return it
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Lower monthly payments (covers depreciation only)
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Down payment requirements are usually the same. Based on the borrowers’ auto history and creditworthiness.
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Mileage Restricted (e.g. 10k to 15k miles per year)
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Customization - Must keep the car in factory condition
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Maintenance - Usually covered by warranty
Pro
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Leasing - Drive a new car every few Years; latest technology and safety; lower monthly costs; purchase at the residual amount once the lease matures
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Financing - The path to vehicle ownership is clear and concise; it is a one-time process.
Cons
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Leasing - The path to vehicle ownership is clear and concise; it is a one-time process.
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Financing - The path to vehicle ownership is clear and concise; it is a one-time process.
Choose Finance If..
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You want to own your car for 8+ years.
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You drive a long distance.
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You want the freedom to customize your vehicle. i.e., wraps, lifts, and other customizations
Choose Leasing If..
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You want the lowest possible monthly payment.
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You love driving the newest models with the latest tech.
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You have a predictable, standard-mileage commute.
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If you live a tumultuous life and the last thing you need in your life is to worry about replacing brakes, rotors, axles, struts, and more which are all inevitable if given the time and usage