| 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. |
|
|
| Ownership |
BUYING:
You own the vehicle and get to keep it at the end of
the financing term. |
|
| 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. |
|
| Up-Front
Fees |
BUYING:
Up-front costs include the cash price or a down payment,
taxes, registration and other fees, and other charges. |
|
| 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. |
|
| Monthly
Payments |
|
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 |
LEASING:
You are responsible for any early
termination charges if you end the lease early. |
|
| Early
Termination |
BUYING:
You are responsible for any pay-off
amount if you end the loan early. |
|
| Vehicle
Return |
LEASING:
You may return the vehicle at lease
end, pay any end-of-lease costs, and "walk away." |
|
| Vehicle
Return |
BUYING:
You may have to sell or trade the
vehicle when you decide you want a different vehicle. |
|
| Future
Value |
LEASING:
The lessor has the risk of the future
market value of the vehicle. |
|
| Future
Value |
BUYING:
You have the risk of the vehicle's
market value when you trade or sell it. |
|
| 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. |
|
| Mileage |
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 |
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. |
|
| Excess
Wear |
|
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. |
|
| 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. |
|
| End
of term |
BUYING:
At the end of the loan term (typically
4-6 years), you have no further loan payments. |
|
