Should I Finance or Lease a Car?


When the time comes to get a new car, many of us ask the same question – should I finance or lease a vehicle?

The answer to this question is not as straightforward as it might seem. It varies depending on what you want from a car and what your driving habits and style are. It changes with what matters to you concerning car ownership – and even if that is something you deem necessary.

So keep reading to find out where you fit on this spectrum. After reading this article, some of you might head to a place like Haines Leasing and lease their new car, while others might choose that financing a car is better.

In the end, the choice is yours.

What is car leasing?

Leasing a car works on the same principle as leasing or renting any other thing – you pay an initial cost and then keep on paying monthly fees for as long as you are driving the vehicle. (Some places do not even demand that initial down payment).

Once the contract is over (usually after three or five years), you will have an option to buy that car that you have been driving for the past few years or get a new lease and leave the dealership in a brand spanking new car.

Since you do not pay the car’s total value but only its expected depreciation (loss of value) for the period that the lease lasts, your monthly payments tend to be much lower than the ones associated with buying a car.

However, many car leases have an annual mileage limit (varying between ten and fifteen thousand miles(. So you would have to pay extra for every mile that is above your allocated limit.

Most car lease deals come with at least the primary insurance and maintenance covered, but this varies from one dealer to another.

Either way, most car dealers reserve the right to charge you for any “excessive wear and tear” done to the car, so you have to take reasonably good care of it unless you want to pay even more.

On the flip side, since the leased cars are new, they are often covered by the manufacturers’ warranty. Also, leasing is an excellent option for someone who wants to drive a car with all the latest tech and safety innovations since they can get a new vehicle to drive every couple of years.

Notice the word “drive” up there –  you do not own the car you are leasing. This means that you cannot make any significant modifications to its interior or exterior as you are not the owner until (and if) you choose to buy it.

What about financing a car?

Paying by cash is the simplest way to finance a new car, compared to leasing, as that is the only way you won’t have to pay any interest.

However, since the odds are that you don’t have tens of thousands of dollars just lying around in case you feel like buying a new car, there are several options at your disposal.

Even if you have the cash for it but prefer making payments every month, consider a car finance deal. There are several types of this deal, but most require an initial down payment and then a set sum of money to be paid each month. Keep in mind that you won’t own the car this way either – that is not until the last payment has been made.

If you want to own the car right away, consider taking a personal loan. That approach might work for you if you find a loan with low interest rates. However, remember that your overall credit score impacts those rates, so taking a loan might not be as easy for you as for someone with a better credit history.

Finally, you can use your credit cards to finance your purchase. This one is tricky because if you don’t keep up with paying your monthly rates, you could pay extra fees and higher interest rates. Not to mention that something like this can do severe damage to your credit rating.


When buying a car, you will be paying higher monthly fees since you have to cover the entire cost of the vehicle. However, you get to own it in return – either right away or after you paid off your loan. Ending a lease prematurely can be a real hassle, while you can sell or trade your car any time you want as the owner.

On the other hand, all of the trouble of selling the old car and buying a new one lands on your shoulders, while people who choose to keep on leasing can simply pick a new car once the old lease is over.

The choice is tough, but you are the one who knows what are the critical factors for you when making this decision.