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LEASING |
BUYING |
| The leasing company, not you, owns the vehicle. Like a rental, you can use it, but when the lease expires, you must return the car unless you choose to purchase it. |
You own the vehicle. When you pay off the loan, it's your car.
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LEASING |
BUYING |
| Up–front costs may include the first month's payment, a refundable security deposit, a capitalized cost reduction (down payment, trade–in, etc.), taxes, registration and documentation fees and other charges. |
Up–front costs include the cash price or down payment, taxes, registration and documentation fees and other charges. |
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LEASING |
BUYING |
| Monthly lease payments are usually lower than monthly loan payments. You are only paying for the amount the vehicle depreciates during the term of the lease. Further, you pay rent charges (like interest), taxes and fees. |
Monthly loan payments are usually higher than monthly lease payments. You are paying for the entire cost of the vehicle. Further, you pay interest and other finance charges and fees. |
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LEASING |
BUYING |
| If you walk away from your lease before the end of the term, you must pay an early termination fee.
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If you decide to end your loan early, you are responsible to pay–off the entire amount of the vehicle. |
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LEASING |
BUYING |
| You may return the vehicle at the end of the lease, pay any termination charges and go home without any further obligation. |
You must sell, or trade–in the vehicle when you want a new car. |
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LEASING |
BUYING |
| Unless you opt for an open–end lease, the leasing company has the risk of the future market value of the vehicle. |
You bear the risk of the car's market value when you decide to either sell, or trade it in. |
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LEASING |
BUYING |
| Most leases impose mileage limitations. (Typically, 12,000 – 15,000 miles). You can negotiate higher mileage allowances, but it will mean higher monthly payments. If you have exceeded your mileage allowance when you turn in your vehicle, penalties can be harsh (range $.08 – $.25 per mile). |
Knock yourself out! Drive as much as you desire. But, mileage will lower the car´s trade–in, or resale, value.
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LEASING |
BUYING |
| Most leases limit wear to the vehicle during the lease term. If you return the vehicle in a condition which exceeds those limits, you will pay a penalty. READ THE FINE PRINT TO DETERMINE THESE CONDITIONS. |
You can beat it to death. But, the more you abuse your car, the less your trade–in, or resale value. |
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LEASING |
BUYING |
| At the end of the lease term (usually 2 – 4 years), you will pay to either finance the purchase of the existing vehicle, or lease another vehicle. |
At the end of the loan term (usually 4–6 years), you have no further loan payments. |
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