What Is the Difference Between Leasing and Financing a Car?

Leasing and financing both allow you to drive a car without paying the full price upfront, but they work in different ways.

Leasing a car is like renting it for a set period—usually 24 to 36 months. You make monthly payments based on the car’s depreciation, and at the end of the lease, you return the vehicle or have the option to buy it. Leasing typically comes with lower monthly payments and a mileage limit, making it ideal for those who want a new car every few years with minimal maintenance concerns.

Financing a car means taking out a loan to purchase it. You make monthly payments toward ownership, and once the loan is paid off, the car is yours. Financing usually involves higher monthly payments compared to leasing, but you can drive as much as you want and build equity in the vehicle.

Still unsure which option is right for you? Visit Auto Bandit to compare lease and finance deals and find the best fit for your budget.