Leasing VS Financing

Key for buy and lease
We all like the idea of getting behind the wheel of a brand new car. When it comes time to get a new vehicle, consumers have options for getting the keys. There is plenty of debate over whether to lease a new vehicle or to finance a new vehicle. Gary’s Automotive is here to try and answer the question once and for all.

Leasing VS Financing

Both options have their pros and cons, and realistically it will come down to whatever makes the most sense to you, your goals, and the vehicle you ultimately decide on. There is no one solution for getting the vehicle you want, so keep that in mind when looking for your next ride. Lets start by looking at some basics.


Cost: No one wants to overpay for a vehicle, so people will instinctively seek out the best deal on. When it comes to costs, a lease will almost always feature a lower monthly payment than financing. Leasing has you paying only the depreciation on the vehicle for as long as you have it, which will be a cheaper payment rather than financing the entire purchase price. If you’re looking for a new vehicle on a tight budget, then a lease is the way to go. When leasing an new vehicle, most repairs are covered under warranty for the duration of the lease as well.

Advantage: Lease

Road TripsDriving: With a lease, the amount of kilometers you can travel in a year are limited in the terms of the lease. While this my not be a problem for those who zip around the city on a daily basis, for those in more rural areas or those who enjoy hitting the open road with no clear destination, this can be a problem. When you go over your allotted distance in a lease, extra kilometers are added up to determine an overage cost. When financing a vehicle, it’s yours to drive as you please, no matter how far you decide to go.

Advantage: Finance

Upkeep: When purchasing a new vehicle, many major issues will be covered under warranty, whether you lease or finance. Small dents and scratches that you may refer to as “character” can end up costing you on a lease. When it comes time to return the vehicle, these small issues will result in “wear & tear” fees that will need to be repaid. While the same fees could be incurred while financing, the repairs aren’t required. One could argue that a leased vehicle isn’t kept long enough to encounter any major repairs, which brings us into our next point.

Advantage: Neither

Ownership: When you purchase a vehicle via financing, it is yours. This means you can paint it, smash it, put a big gaudy spoiler on it, or pretty much whatever you like. None of that can be done to a leased vehicle. If customization is something that is important to you, then a lease is definitely not for you. Furthermore, it has been shown that the longer you own a car, the cheaper it is to finance vs lease. If you’re buying a vehicle to hopefully pass on to the kids someday, leasing just doesn’t make sense. Overall, actually owning the vehicle will make for a better ownership experience over leasing it.

Advantage: Finance 

Deciding For Yourself

Lets take a look at two different scenarios. Both represent average buyers who could very well be in the market for a new vehicle.

TMinivan Road Triphe Minivan/Crossover Shopper – A few nights a week, the kids need to be taken to soccer and basketball, as well as regular school runs and groceries. Weekends are filled with with day trips to local museums and grandmas house. For this buyer, due to the unpredictable nature of damages to the vehicle (try to tell me kids are predictable) and the extended amount of driving needed to be done, as well as the plan to likely hold on to this vehicle for as long as possible, financing makes more sense.

The Business Professional – From their apartment, the business professional commutes about 15 to 20 minutes to work each day. On the weekends, they like walking around the market or meeting with friends on a patio for some drinks. For this buyer, leasing could work better, as it can allow them to have a higher trim level of vehicle for a lower monthly payment, and issues like repairs and distance aren’t a big factor as they are all within the lease. This also gives the opportunity for the leaseholder to get into a new vehicle in a few years.

Overall, financing can be cheaper, but only if you’re the right type of buyer. As we mentioned above, both options work for the right buyer. Once you know your goals with a new vehicle, you’ll be able to make a better decision for yourself.


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