Finance vs. lease:
the pros & cons
What are your goals? We all have different priorities - in cars, life, and finances. When deciding on financing vs. leasing, what's right for one person can be totally wrong for another.
We have a team of amazing finance experts who’ll help you find the best option for your budget and lifestyle.
Pros of buying
- Ownership and Asset Value: Financing allows you to own the car, giving you an asset that retains value and can be sold or traded at any time.
- No Mileage Limits: Unlike leasing, financing doesn't typically come with mileage restrictions, allowing for unlimited travel without extra fees.
- Cost Savings Over Time: Once the car loan is fully paid off, you can enjoy the benefits of no monthly payments, resulting in long-term cost savings.
- Freedom to Sell or Trade: With ownership, you have the flexibility to sell or trade your vehicle whenever you choose, providing potential financial opportunities.
Cons of buying
- Higher Monthly Payments: Financing often involves higher monthly payments compared to leasing, making it less budget-friendly for some individuals.
- Maintenance and Repair Costs: As the vehicle ages and warranties expire, you become solely responsible for maintenance and repair expenses.
- Longer Commitment: Financing typically involves longer-term commitments, as loan repayment periods can extend for several years.
- Limited Access to Newer Models: Financing may limit your ability to upgrade to newer car models frequently, as you must fully pay off the loan before trading or selling the vehicle.
Pros of leasing
- Access to Newer Models: Leasing allows you to enjoy driving the latest car models with advanced features and technology.
- Lower Repair Costs: Since lease terms typically coincide with the manufacturer's warranty, you can avoid unexpected repair expenses.
- Flexibility for Changing Needs: Leasing provides flexibility for individuals whose transportation needs may change over a short period, such as those on temporary work assignments or frequent travelers.
- Minimal Down Payment: Leasing often requires a lower upfront payment compared to financing, making it more financially accessible.
Cons of leasing
- No Ownership or Equity: With leasing, you don't build equity in the vehicle, as you're essentially renting it for a specific period.
- Mileage Restrictions: Leases typically come with mileage limits, and exceeding the allowed mileage can result in additional fees.
- Potential Overpayment: In some cases, leasing can lead to paying more over the long term compared to financing, especially if you regularly lease new vehicles.
- Long-Term Cost: If you consistently lease vehicles without ever owning one, you may face a lifetime of perpetual car payments without the benefit of eventually owning a vehicle outright.
A few things influence your monthly lease payments, including:
- Lease charges
- The value of the vehicle
- Any down payment you make
- Interest rates
- Taxes and fees
- The anticipated depreciation of the vehicle
Both financing and leasing have their benefits. Whatever option you choose, our professional finance managers will go through all the details and answer any questions regarding warranties and other financing options to protect your investment. We look forward to meeting with you soon to discuss your needs and options!