What is the difference between financing the car and leasing the car mean?

Question

Please explain!

Answer 1

Financing means you get to keep the car when you've paid the bank the amount of money they let you borrow in order to get the car in the first place.

Leasing the car means you pay a dealer or dealer's bank to borrow the car and at the end of the lease you have to give the car back and pay any damages you might have caused and mileage over the maximum allowed.

Financing is more expensive month to month. But the money you put in to the car is an investment you'll get to keep in the end.
Leasing is cheaper month to month. Good for people who like to change cars every 2-3 years.

Answer 2

The answers to this question always amaze me!!!

When you FINANCE a car, you finance tax and license on a depreciating asset with no guaranteed value at any time during the loan. This means, your wife gets pregnant and the car is no longer what you want, you own it until you own enough of it to sell it and start over.

When you LEASE a car, you always know what the car is estimated to be worth at the end of the term. The good news is, if your home-life changes, you owe nothing if the car is not worth the money. If the car is worth more, you can purchase it for that guaranteed value and then sell it for a profit. Leased vehicles typically have no maintenance or repairs or even tires to pay for since you get out of the car at 3 years (best lease term).

So, the way to calculate which is better for you: add up the total monthly payments times the number of months to purchase a car on payments plus your down payment. Write that figure down.

Add up the total number of lease payments times the number of payments minus one (you pay leases up front so a 36 mo lease has 35 payments) add the down payment and then add the residual value then subtract the lease deposit. This would be the worst case scenario to own a leased vehicle at the end of the term. (assuming you still want to!!!)

Now, compare the two figures! Dont worry about miles on a lease either. The ONLY time miles come into play are if you return the vehicle to the leasing company. Not if you buy it or trade it in...

I, personally, will never finance a car again! I change what I want to drive every few years and have never been disappointed wiht having to drive a new car each couple!!! Also, I have never paid for anything but tags and make no downpayment to qualify. You might say that I never own anything but I own the best parts of each car I drive and give them back when they are starting to wear out!

Answer 3

If you finance a car, you are borrowing money from some bank and paying them back for the car. You own it afterwrds.

If you lease a car you are borrowing the car like a long term rental for a monthly fee and have a restriction on mileage. You don't own the car when you are done paying your payments.

Answer 4

financing to own, leasing to rent and get another.