Understanding your long-term intention is crucial when it comes to having a car. First thing first, what’s the difference between financing and leasing a car?
Leasing and financing a car are different things that can both get you to drive a car. However, some people still are not aware of what’s the difference between leasing and financing a car.
The main difference between the two is the ownership of the vehicle. By leasing a car, the vehicle is never yours to keep. It must be returned to the dealer when the lease time is up. While financing a car means you own the car by paying the car off for a designated amount of time.
The Benefits of Leasing a Car
It’s normal to ask what’s the difference between financing and leasing a car. Either leasing and financing a car, they both come with their own benefits. If you choose to lease a car, you can have lower monthly payments. There usually will not be any down payment and sales tax. However, upon returning a leased vehicle, you might have extra charges to pay due to racking up car mileage or unrepaired damages.
Leasing a car also means fewer repair expenses as you are covered by a manufacturer’s warranty during your lease period. You still, however, need to do regular maintenance for the vehicle. Another benefit of leasing a car is that you can drive a new car more often because you can lease a new vehicle every few years. If you are into changes and constantly looking to enjoy new vehicles, leasing a car might be your choice.
Worrying about selling an old vehicle will not be a bother if you lease a car since the vehicle is not yours. However, you have an open option to buy the vehicle once the lease term ended for a pre-set price.
The Benefits of Financing a Car
Buying a car, you pay less over the long term, you have an option to sell it in the future, you don’t have to worry about mileage limit, and there are no restrictions on the vehicle’s appearance.
As a car owner, you can flexibly lease or sell your vehicle. You can pay off the existing loan balance with it. The best part about having your own vehicle is having the option to accessorize it the way you want. This is only doable through financing a car and making it your own.
In the end, the option between leasing and financing a car depends solely on your long-term intentions. If you are the type of person who does not like the hassle of having to buy and sell cars, and you love having new cars every few years, leasing might make more sense for your intention. On the contrary, if you are the type of person who would like to own a car and use it according to how you want to use it, financing a car would suit you better.
Now you know what’s the difference between leasing and financing a car. Make sure to understand your level of financial commitment and long-term intentions first before choosing to lease or finance a car.