When buying a car, you would have a lot of questions to ponder over. This would include thinking about the make and model, mileage and fuel efficiency, and even the color. Once you have decided all these, the main question is when you wonder how best to finance your vehicle.

Very few of us can actually afford to pay cash in full. Most of us have to resort to either financing or leasing a car. So, if these are your two options, too, here are the pros and cons of financing vs. leasing a vehicle as listed out by the experts.

Leasing your car
A lease is a way of owning a car by renting it out. At the end of the lease period, you can either return the car to the lease company or opt to buy it out, if your contract allows you to. Let’s take a look at the pros and cons of leasing a car.

Pros

• Through a lease, you can drive a new car every three years, which is the normal period of a lease. So, you can take advantage of the latest wheels on the road.
• You do not need to worry about the troubles of paperwork once the lease ends. You can simply return the keys and move on. It is that easy.
• You save a lot of money on a lease as you do not have to put a down payment on the car. Even if you do require a down payment, it would usually be a minimal amount.

Cons

• A lease usually comes with a lot of fees that you need to consider, such as an acquisition fee. As you will never own the car, this is money that is lost.
• You would need to take out gap insurance. This is an added expense.
• Getting out of a lease is tough unless you can swap the lease with someone willing to take it on.

Financing your car
Financing a car refers to taking out a loan or borrowing money to pay for your car so you can own it. Let’s take a look at the pros and cons of financing a car.

Pros

• There are several different options for financing your car that make for a competitive market where you can benefit from great deals. These include car dealerships, banks, credit unions, credit cards, home equity loan, and many more options.
• Convenient, personalized, and fast processing of auto financing from banks, credit unions, and dealerships.
• You own your vehicle, which technically means you can do what you like with it in terms of designing or modifying it after purchase.

Cons

• You need to be careful and watch out for scams while financing cars online.
• Early payments to dealership financing mainly consists of a lot of interest.
• Approval is heavily dependent on your credit score. So, advertised rates may not apply to you in particular.

These pros and cons of financing vs. leasing a vehicle as listed out by the experts call for due consideration before making any car purchase decision.