While there are numerous advantages to having a vehicle at your disposal, it is quite difficult to understand which would be better, leasing or financing an automobile. There are several factors that go into making this decision, and it completely depends on the preference, usage, and lifestyle of an individual.

Let us have a look at the reasons that determine what’s best in financing vs. leasing a vehicle.

• Upfront payment
  You cannot neglect your budget, as and that will help you understand the more suitable option out of financing and leasing a vehicle. While you only have to make a monthly payment when you lease a vehicle, an upfront payment needs to be made when you’re getting a vehicle financed. If you already own a car, a trade-in option can help you reduce the down payment to be paid upfront. However, that might not always be an option provided by the car seller.
• Monthly payments
  Leasing a car definitely proves more economical if you’re worried about the monthly payments that have to be made for the ownership of the car. In some cases, people even lease a more luxurious car than they could have afforded if they were financing one, because the lease payments are lesser. So, the monthly payments are definitely lower in case you’re leasing a car.
• Car ownership
  Although the car is yours to use when you’re leasing the vehicle, the ownership truly lies with the leasing company. However, when you’re financing a car, it is registered with your name and thus it is owned completely by you. Thus you can customize the vehicle at will and also lend it to your friends or family if you wish to, without any questions raised by a third party.
• Warranty cover and maintenance
  The warranty covers most of the costs in case of a new vehicle; however, the maintenance is completely taken care of by the owner. In case you are leasing a vehicle, the service is paid for by the leasing company. Although, you might have to pay a sum in case the car is involved in an accident. In such a condition, financing a car may be more favorable as the insurance company will cover all costs. Depending on the driving habits, you have to decide what’s best – financing vs. leasing a vehicle.
• Mileage limit
  There’s a limit in the mileage that once exceeded, can lead to much higher prices paid per mile, in the case of a leased vehicle. The mileage cap depends on the leasing company and the type of car and also the duration for which you’re leasing the vehicle. The cost of additional miles can range between 15 cents to 40 cents per mile usually and that is when the total cost paid starts going uphill. That’s not the case with buying a vehicle and you can cover as many miles on the car as you’re the owner of the vehicle.