Finance or Leasing which is better?

    difference between Finance and Lease

    The key difference between Finance and Lease is that in finance the customer pays off the price of the product by paying off monthly installments and if the customer fails then the lender takes away the product as the lender holds the lien on that product till payment of entire debts, whereas, in lease one has to pay monthly fixed rental for using the asset to the owner of such asset and asset is generally taken back by the owner after the expiration of lease term. There are following things through you can Know which is better for you.


    • Lease: You don’t own the car; you pay to use it for a fixed period of time. At the end of the term, you either return it or buy it.
    • Finance: You own the vehicle and get to keep it, use it how you want, for as long as you want, and add any customizations or modifications that you want.

    Down Payments

    • Lease: Usually includes the first month’s payment, a refundable security deposit, down payment, taxes, registration fees, and possibly other fees.
    • Finance: Usually include the cash price or a down payment, taxes, registration fees, possibly some other fees.

    Monthly Payments

    • Lease: The vast majority of the time, lease payments will be lower than loan (financing) payments because you only pay for the depreciation of the vehicle during the time of the lease, plus interest, rent charges, taxes, and fees.
    • Finance: Loan payments are usually higher than leasing, because you’re paying for the entire value of the car.

    Early Termination

    • Lease: If you want to end the lease early you will have to pay early termination fees, which usually can cost as much as sticking with the rest of the lease’s term.
    • Finance: You can sell or trade in the vehicle whenever you want, and the money you make selling it can be used towards paying off the loan.

    In the end, whether or not you want to lease or finance your car depends on your long-term intentions. If you’re the type of person that likes to have new cars every few years, then leasing makes much more sense financially. However, if you intend to buy a car and use it until it dies, then taking out a loan is your better option. In between, it all depends on the level of financial commitment and ownership you prefer to have of your car.

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