Is It Better to Lease or Finance a Car?

Photo of author

( — October 13, 2018) — Buying a car upfront is simply not an option for most people. Cars, just like real estate, are quite expensive, so you have to do your homework and math before making the purchase. Once you’ve settled on the type of car you’re after, you have to decide whether you’re going to lease it or finance it. Here’s where most people struggle to decide, as both come with their own pros and cons. Don’t worry though, because with our help, you’ll be able to choose the right option plan.


With a financing deal, you’re basically getting a car loan upfront to purchase the car and then paying that loan off at an interest rate, usually on a term of five years or more. The pros are that the car is yours and you can do whatever you want with it, without any limitations. You can keep it or sell it, but do take depreciation into account. You can also take a look at this website and you can find out how to get a car title loan.

New cars depreciate the most, and a brand-new car might be worth half its price in just a few years time. “The more expensive the car, the more it depreciates” is the general rule of thumb to live by. Insurance isn’t affected by whether you’re financing or leasing the vehicle, so that’s something to take into account if you’re worried about insurance rates.


When leasing, you’re paying for the car on a monthly basis but you don’t actually own the car. When the leasing term is over you have to return the car. It’s basically like a rent-a-car service, except the car is new and you’ll get to keep it for several years at a time. The good news is that leasing is always cheaper than financing for a car of equal value, and with leasing, you can get a brand-new car every couple of years to replace the previous one. As a result, you don’t have to deal with depreciation and running costs, since most of the time all of the services you’ll need to perform fall under warranty.

The cons being that you never have ownership of the car and are pretty limited with what you’re allowed to do with it. To keep some resale values, dealerships restrict you to a certain amount of miles per year and if you go over that threshold you’ll have to pay extra for every mile you cover. So as you can probably imagine, it’s a lot better to go for a financing plan if you intend on covering a lot of miles.


It’s up to you to decide whether you should finance or lease a vehicle. Most people who don’t drive a lot and want to have a new car every couple of years opt to lease. People who want to keep the car and put a lot of miles on it prefer financing. Want to see how much a car loan will cost you?