Buy vs Lease—What’s the Difference?

The Quick Facts About Buying

When you buy a car, the process is fairly straightforward. You pay toward full ownership of your vehicle. Once you attain ownership via paying off a loan, the car is yours to do with as you choose. You can drive it well into the future, or sell it later on down the line, whether that will be privately or to a dealership.

When you enter the dealership looking to buy a car, you'll speak with a finance representative to begin the financing process. They'll speak with local lenders on your behalf to find a variety of loan options that fit your needs. Then, you'll make a down payment toward your car.

The Lowdown on Leasing

Leasing a car means that you're essentially borrowing it from the dealership. While you may not have complete ownership, you do get to drive a fantastic new car. Your lease terms include a set number of months you'll have to drive your car before it's time to return your leased ride.

Your payments cover the depreciation that takes place as the leased car is driven. You sometimes won't need to bring in a down payment when you lease a car-this makes it easier to start driving a leased car. You'll still have manufacturer warranties that cover you in the event of an emergency when you lease, which is another marked advantage.

The Advantages to Buying and Leasing

The differences between these two methods go beyond the simple question of ownership and renting. Each option offers its own distinct set of perks that appeal to different people in varying situations.

When you buy, you get to do whatever you want with your car. There's no limit to miles driven, and you can customize it to your heart's content. It's also an investment in your future, as you'll be able to sell or trade it to recover some of its cost.

Leasing a car means that you can upgrade to the latest in technological and automotive advancements every few years. You can also lease completely different models, which makes adapting to major life changes easier. You get plenty of options and choices in between leases.