When you are on the hunt for a new vehicle, you will have many decisions to make. Not only do you have to decide which vehicle you want to drive home in, but you also have to decide how you will be paying for that vehicle. There are many payment methods available, but it can be difficult to decide which option is the best fit for your situation. Today we’re going to help by answering the question, “What’s the difference between leasing and financing?”.
Leasing vs Financing
First let’s explore what these two forms of payment are referring to. Leasing a vehicle is a little bit like renting it. You still have to put some money down when you sign a lease and you still have a monthly payment, but these payments are often less than they would be if you were to purchase the vehicle with a loan. Most leases last for approximately two to three years and at that point you simply return the vehicle to the dealership and you can lease a new vehicle. When you lease a vehicle, the dealership will also most likely cover any routine maintenance that will occur during the time it is in your possession.
When you finance a vehicle, that means you are purchasing the vehicle, most likely with the help of loans. Financing is the management of loans and payments that will allow you to own the vehicle, not just rent it. When you finance a vehicle you will most likely have higher monthly payments, but you are also making an investment and will eventually own the vehicle after the payments are complete.
Each situation has its own benefits depending on your car driving habits and financial situation. You should consider leasing a vehicle if you like to drive a new car every two to three years, prefer lower monthly payments, driver under 12,000 miles per year and want to avoid paying for any major repair work. You should consider purchasing and financing a vehicle if you want to keep your car for longer than three years, drive more than 12,000 miles a year, customize your vehicle and/or plan to payoff your vehicle so you will no longer have to make monthly payments.
Read More: Car Buying Tips and Tricks
If you are interested in learning more about leasing or financing a vehicle, call or visit Hall Cars. We will be able to help you decide which payment method is the right fit for your particular situation. Schedule a test drive today in Brookfield, WI to get started today!