There are many differences between financing and leasing. Prices, fees, and warranties are just to name a few. Although both options offer great benefits there does seem to be a drawback.
Financing works in a way where you’re responsible for the whole price of the car. You negotiate the price of the car and look for ways to purchase it. Whether it be straight up cash, bank, etc. With this option, it’s going to be more expensive. In addition, it’s going to make your monthly payments higher. However, the benefits are great. You’re able to drive the car in any way you want, whether customized or not. You’re not limited to miles driven on the car. Although some restrictions should be applied here as to avoid overuse. In addition, it’s a car that you OWN.
Leasing works in a way where you’re only responsible for the difference in the price that you negotiate and the car’s residual value. Basically, you pay for the depreciated that occurs over the term of the lease. There are some benefits to this though. Having lower monthly payments, never needing to worry about trade in, smaller down payment, always have a new car and tax savings. However, what you’re giving up is the miles you’re able to drive per year on the car is limited. As well as returning the vehicle in nearly its original condition with no excess wear and damage. In addition, leasing requires excellent credit with some few exceptions.