Leasing vs. Buying |
| Ownership |
|
Ownership |
AUTO LEASING:
You do not own the car, you just rent it. At the end of the
lease you can return the car or choose to buy it. |
|
AUTO BUYING:
You own the car and get to keep it at the end of your payments. |
| Monthly Payments |
|
Monthly Payments |
AUTO LEASING:
Monthly lease payments are usually lower than monthly loan payments
because you are paying only for the vehicle's depreciation during
the lease term, plus rent charges (like interest), taxes, and
fees.
|
|
AUTO BUYING:
Monthly loan payments are usually higher than monthly lease
payments because you are paying for the entire purchase price
of the car, plus interest and other finance charges, taxes,
and fees. The larger your down payment the smaller your monthly
payments. |
| Early Termination |
|
Early Termination |
AUTO LEASING:
You are responsible for any early termination charges if you
end the lease early.
|
|
AUTO BUYING:
You are responsible for any pay-off amount if you end the loan
early. |
| Vehicle Return |
|
Vehicle Return |
AUTO LEASING:
You may return the car at lease end, pay any end-of-lease costs,
and "walk away." |
|
AUTO BUYING:
You may have to sell or trade the vehicle when you decide you
want a different vehicle. |
| Mileage |
|
Mileage |
AUTO LEASING:
Most leases limit the number of miles you may drive (often 12,000-15,000
per year). You can negotiate a higher mileage limit and pay
a higher monthly payment. You will likely have to pay charges
for exceeding those limits if you return the vehicle. |
|
AUTO BUYING:
You may drive as many miles as you want, but higher mileage
will lower the vehicle's trade-in or resale value |
| Excess Wear |
|
Excess Wear |
AUTO LEASING:
Most leases limit wear to the car during the lease term. You
will likely have to pay extra charges for exceeding those limits
if you return the vehicle. |
|
AUTO BUYING:
There are no limits or charges for excessive wear to the vehicle,
but excessive wear will lower the vehicle's trade-in or resale
value. |
| End of term |
|
End of term |
AUTO LEASING:
At the end of the lease (typically 2-4 years), you may have
a new payment either to finance the purchase of the existing
vehicle or to lease another car. |
|
AUTO BUYING:
At the end of the loan term (typically 3-5 years), you have
no further loan payments. |
