Should You Lease or Finance a New Vehicle?

If you’re ready to begin searching for your next vehicle, it’s important to go over your options and decide whether leasing or financing a vehicle is right for you. Before you make this decision, you need to consider the pros and cons of each option so you can feel confident in the route you take.

At Burlington Kia, we help drivers find impressive lease terms and financing options on high-quality vehicles near Philadelphia and Bristol. To find more information and personalized advice, call or visit our finance department in Burlington, NJ. One of our expert finance specialists will be eager to help you create your ideal leasing or financing plan.

The Difference Between Leasing and Financing a Car

The main difference between leasing and financing a vehicle is its ownership. When you lease a car, you get to use it for a fixed amount of time, but you don’t own it. When the lease ends, you can decide to return the car or purchase it. Financing gives you ownership of the vehicle, so you’ll have more freedom with how you use it. When comparing these two options, you’ll notice significant differences in monthly payments, down payments, and restrictions. Considering these factors will help you decide which option is the most beneficial to you.

Pros and Cons of Leasing

Pros of Leasing

• Lower monthly payments: Many drivers choose to lease a car because the monthly payments are lower than loan payments.
• It’s easy to switch vehicles: If you enjoy changing vehicles often, leasing makes it easy to switch out your vehicle. Keep in mind that early termination fees may apply if you return the vehicle before your lease is up.
• You don’t have to worry about depreciation: Since you don’t own the vehicle, the burden of new vehicle depreciation won’t fall on you.

Cons of Leasing

• Mileage restrictions: Many leases have restrictions on how many miles you can travel in the vehicle. This can pose a problem for drivers who travel long distances for work or recreational purposes.
• Customization restrictions: Leases also limit how much you can change and customize a vehicle. If you do make changes, you’ll need to remove them before you return the car.
• You have to keep it in good condition: If you return your leased vehicle with damage or excessive wear and tear, you’ll be charged additional fees.

Pros and Cons of Financing

Pros of Financing

• The freedom to use the vehicle as you please: Since financing gives you ownership of a car, you won’t have mileage or customization restrictions.
• You won’t be charged for wear and tear: If your vehicle gets damaged, you won’t have to pay fees to the dealership.
• You can resell or trade-in your vehicle: You can get some of your money back when you sell your car.

Cons of Financing

• Higher payments: Oftentimes, your down payments and monthly payments will be higher if you decide to finance.
• Depreciation concerns: New vehicles depreciate during the first few years, which can affect the resell value of your car.
• The cost of maintenance: After the manufacturer’s warranties end, you’ll be responsible for the cost of maintenance and repairs.