Understanding the Difference between Car Lease and Car Buying

Car leases have been a superb way to enjoy a new car without burdening your finances. As you do not require making the same kind of down payment or take out a special loan for leasing a car, you would be able to drive a new car without the need to burn a significant hole in your pocket.

Car leasing compared to car buying

Prior to you moving forward, it would be pertinent that you know the difference between car leasing and car buying. Prior to deciding you require a car lease, it would be pertinent to know if car-leasing serves right for you.

Owner of the car

It does not matter how you pay for the car. However, when you purchase a car, it would belong to you. In case, you were paying for the car with a loan, you would need to make payments towards the loan. However, the car would be in your possession. You would own the title to the car. On the other hand, when you lease a car, you do not own the car. You would be paying for the usage only. The lender would be the real owner of the leased car.

Cost of the car

When you purchase or finance the car, you would be required to place a down payment. The down payment cost would be based on what the lender desires along with your credit score. Car leasing does not need a down payment. There have been fees to pay up front. It would be first month payment, security deposit, acquisition fee and other taxes. In case, you wish to lower your monthly payment, you could pay additional upfront when signing the lease.

Lease end payment

When you actually lease a car, you would be having several options. You may choose to buy the car. The title would be your proof of ownership. A number of people would return the leased car after the lease expires. However, some people would choose to buy the car at the end of the lease.

Future value of the car

When you purchase a car, it comes with future value. When you own a car, you would be able to sell it at a future date and time. The price would be based on the type of car and its maintenance. When you lease a car, you do not own the car and cannot sell the car later.