Leasing vs Financing

What Does Leasing Mean?

When you lease a new car from a dealership, you sign a contract that allows you to use the vehicle for a set amount of time. At the end of the lease, you can purchase the car or return it to the dealership. Leasing means you don’t own the vehicle; you’re just paying to use it for a fixed period of time.

Pros of Leasing a Vehicle

• Lower monthly payments compared to financing.
• You get to drive the latest models, meaning you can enjoy new technology and modern features.
• Since leasing is less of a commitment than financing, you can easily switch to a different new vehicle when your lease ends.
• You don’t have to worry about depreciation, trade-in value, or how much the vehicle will sell for.

Cons of Leasing a Vehicle

• Because you’re paying to borrow the vehicle, you must return it in good condition, or else you’ll face fees.
• Most leases set mileage restrictions, which limit how much you can drive in your leased vehicle.
• You can’t change or customize the vehicle to fit your personal style and needs.
• You can’t make any of your money back by selling or trading in the vehicle when you’re ready to change cars.

What Does Financing Mean?

Financing a car refers to taking out a loan in order to purchase a vehicle. Most notably, financing gives you ownership of the vehicle, but you still have to make monthly payments until your loan is paid off. You should also consider that on top of your monthly payments, you will likely have to pay fees and interest if you decide to finance.

Pros of Financing a Vehicle

• Financing a car gives you the freedom to drive as much as you want.
• The dealership won’t charge you for customization or wear and tear.
• You can resell or trade in your vehicle whenever you’d like.
• When your loan is paid off, your monthly payments end, and you’ll have built equity by financing.

Cons of Financing a Vehicle

• Higher monthly payments compared to leasing the same vehicle.
• You’re responsible for maintenance and repair costs after your warranty ends.
• Depreciation, condition, and mileage can negatively impact your car’s resell or trade-in value.
• Depreciation, condition, and mileage can negatively impact your car’s resell or trade-in value.

As you can see, there are many factors to consider when deciding whether leasing or financing a vehicle is best for you. At Premier Honda, our finance specialists in our finance department are dedicated to finding a plan that works for your specific needs. If you’re ready to apply for financing, give us a call or get pre-qualified online today.