If you’re in the market for a new or used vehicle, you may have found yourself wondering if it is better to lease a car or go through traditional auto financing to get the car you want. And you wouldn’t be alone in that thinking. So many customers across the country that we work with every day are trying to decide if leasing or financing a vehicle is the best option for them.
Here at Drivrz Financial, we understand how stressful this time can be. This is why today we’re excited to share this little guide to everything you need to know about auto leasing vs. traditional auto financing so you can make the best choice for you.
The easiest way to look at auto leasing compared to auto financing is to rent or buy a home. Granted, there is more to it, but that’s a great way to go into the process.
Pros Of Leasing a Car
Leasing a car provides upside because you can keep your monthly payments lower while also being able to afford a higher-quality new or used car. Yes, you can lease used vehicles as well!
At the end of your terms, you don’t have to decide whether to keep the car or sell it privately or back to a dealership. Instead, you bring it back and trade it in for a new leased vehicle once your lease ends.
Differences Between Leasing Vs. Buying A Car
Let’s quickly look at some of the most significant differences between leasing or buying a vehicle.
Ownership
- Auto Lease: Leasing a vehicle is essentially similar to a long-term rental. You pay the rent to use the car.
- Auto Finance: The bank owns your vehicle until you pay off the loan.
Duration
- Auto Lease: Lease terms typically are 2 to 4 years, and at the end of your term, you will have the option to return the vehicle or purchase it or lease another one.
- Auto Finance: Finance terms are typically done for 4 to 6 years.
Repayment
- Auto Lease: Your monthly payments are based on the car’s depreciation during the term of your lease, rent charges, and other taxes and fees.
- Auto Finance: Your monthly payments are based on how much you are financing of the total price of the vehicle, interest charges, and other taxes and fees.
Mileage and Limitations
- Auto Lease: Many leased vehicles have mileage limits, and if you exceed those, you will be charged a fee per mile when you turn the car in. And you can get charged extra if there is more than normal wear and tear on your vehicle.
- Auto Finance: There are no mileage limits, and you can customize the car however you like.
These are just a few of the most significant differences between auto leasing and traditional auto finance. If you are still unsure which option is best for your needs, the helpful pros at Drivrz Financial are always here to help guide you down the right path to owning the car of your dreams. Call us today!
