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Leasing vs. Buying

Ownership Ownership
LEASING:
You do not own the vehicle. You get to use it but must

return it at the end of the lease unless you choose to buy

it.

BUYING:
You own the vehicle and get to keep it at the end of the

financing term.

Up-Front Fees Up-Front Fees
LEASING:
Up-front costs may include the first month’s payment, a

refundable security deposit, a capitalized cost reduction

(like a down payment), taxes, registration and other fees,

and other charges.

BUYING:
Up-front costs include the cash price or a down payment,

taxes, registration and other fees, and other charges.


Monthly Payments
Monthly Payments
LEASING:
Monthly lease payments are usually lower than monthly loan

payments because you are paying only for the vehicle’s

depreciation during the lease term, plus rent charges (like

interest), taxes, and fees.

BUYING:
Monthly loan payments are usually higher than monthly lease

payments because you are paying for the entire purchase

price of the vehicle, plus interest and other finance

charges, taxes, and fees.

Early Termination Early Termination
LEASING:
You are responsible for any early termination charges if

you end the lease early.

BUYING:
You are responsible for any pay-off amount if you end the

loan early.

Vehicle Return Vehicle Return
LEASING:
You are responsible for any early termination charges if

you end the lease early.

BUYING:
You may have to sell or trade the vehicle when you decide

you want a different vehicle.

Future Value Future Value
LEASING:
The lessor has the risk of the future market value of the

vehicle.

BUYING:
You have the risk of the vehicle’s market value when you

trade or sell it.

Mileage Mileage
LEASING:
Most leases limit the number of miles you may drive (often

12,000-15,000 per year). You can negotiate a higher mileage

limit and pay a higher monthly payment. You will likely have

to pay charges for exceeding those limits if you return the

vehicle.

BUYING:
You may drive as many miles as you want, but higher mileage

will lower the vehicle’s trade-in or resale value

Excess Wear Excess Wear
LEASING:
Most leases limit wear to the vehicle during the lease

term. You will likely have to pay extra charges for

exceeding those limits if you return the vehicle.

BUYING:
There are no limits or charges for excessive wear to the

vehicle, but excessive wear will lower the vehicle’s

trade-in or resale value.

Excess Wear
End of term
LEASING:
At the end of the lease (typically 2-4 years), you may have

a new payment either to finance the purchase of the existing

vehicle or to lease another vehicle.

BUYING:At the end

of the loan term (typically 4-6 years), you have no further

loan payments.

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