Car Financing Vs Leasing: Which Is Better? - Tnifc-Ecom

Car Financing Vs Leasing: Which Is Better?

If you’re a driver who likes to maintain total control over your ride, buying your vehicle might be the best choice. Since leasing a car means you’ll need to be careful about wear and tear and mileage restrictions when it comes to maintaining it, these things can take a toll on your wallet.

What Is Car Financing?

Car financing refers to the buying or leasing of a car. This type of transaction involves using an established financier who will buy your vehicle from you and then lease it to you for a certain period. This process usually comes with several other policies, which include paying an additional amount to have insurance on the vehicle, a warranty on the vehicle if it’s less than six months old, and a trade-in for another car if requested.

What Is Car Leasing?

On the other hand, car leasing is an option that allows you to drive a new car every two or three years. This type of car transaction is not exactly like financing. Instead of buying a new vehicle and paying it off through equal monthly installments, you lease the vehicle and pay a set amount at the end of your lease period.

In contrast, with an auto loan, you’ll have flexibility with financing options so that whatever financial plan works for you is possible – paying in full upfront or making payments off the total cost of acquiring your vehicle. Regardless of how much responsibility you want to assume when owning a car, leasing or financing will be right for many people.

However, there are benefits to financing that you may not be aware of. Here are five reasons to consider financing your vehicle rather than leasing:

1. No Limit To Mileage

When you purchase a car directly, you purchase all the mileage that goes along with it. If you pan out and make long road trips several weekends a year, you’ll be the one paying for it – not the leasing company.

However, with car financing, you’ll be able to drive as much as you want without worrying about getting a more expensive vehicle to maintain your preferred driving habits. While mileage restrictions go along with financing, they aren’t nearly as severe as those imposed on leased vehicles.

2. This Option Is Better For Buyers With Low Credit Scores

Although leasing does offer lower monthly payments than buying a car on credit, lenders who approve your loan won’t bother running a credit check on you when determining your rates. This means those with bad credit can get the car they want at the price they need.

3. No Wear-And-Tear Charges

If you lease a car and let it get old, you’ll be charged for the vehicle’s diminished value – a fee that makes your monthly lease payment shoot up. This can significantly impact people who like to keep their vehicles for many years before trading them in.

With auto financing, you won’t have to worry about this, and your interest rate won’t go up due to age or wear and tear.

4. Longer Payment Terms

Most leasing companies offer anywhere from 12-60 month terms if you want to keep your payments affordable. While this is great for budgeting purposes, it doesn’t give people enough time to pay off their cars when they want to own them outright.

With vehicle financing, you can decide how long it takes to pay up your car, and you’ll have the choice of making longer payments when you want to buy a new one.

5. Freedom To Sell Or Trade In The Car

Owning a car can be complicated, especially when you have multiple vehicles and want to keep them all. When you lease a car, the leasing company owns your car for an extended period – giving them total control over how you use it. In contrast, if you finance a vehicle, you can sell or trade-in your current vehicle at any time and profit from that vehicle’s sales price.


As you can see, financing your car has several benefits over leasing. If you wish to get a car that you can afford, or if you want to avoid all of the hassles associated with leased vehicles, go ahead and finance your next vehicle with Auto Car Loans

By: Raymond James

About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals.

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