Article  Auto Loans or Auto Leasing: Which is Better? Every day, car shoppers are faced with an important decision: Should you buy or lease that new vehicle? On one hand, the best auto loans allow you to get a low interest rate so you can actually own your vehicle. On the other hand, leasing your vehicle could allow you to enjoy lower monthly payments as you’re just renting the vehicle. So, which is the better option: Auto loans or leasing? Keep reading to find out. When it comes to actually owning the vehicle, car loans allow you to do this. This means that you get to keep the vehicle after your loan is paid off, letting you drive without having a monthly payment hanging over your head. With leasing, however, you don’t own the vehicle. At the end of your lease, you have to return the vehicle to the company. At this point, you can sometimes buy the vehicle (far more expensive than if you’d taken out a car loan), or you can take out a lease on a new vehicle. The downside with auto leasing is that you’ll always have a monthly car payment for the rest of your life. When it comes to upfront costs, auto leases often have a slight advantage over auto loans. With a car loan, you may have to put out a large down payment to get the payment you’re looking for. Auto leases, on the other hand, typically have very low down payments, allowing you to get behind the wheel without spending much money out of pocket. Monthly payments are also typically cheaper with a car lease than with car loans. This is because you’re paying for the entire car with a loan plus interest and other fees. With auto leases, on the other hand, you’re only paying for the depreciation of the vehicle during the time you’re using it. As a result, the payments on a lease are usually much cheaper than a car loan. Of course, when you lease a vehicle, you don’t have any equity in it since you don’t own it. As far as wear and tear and mileage is concerned, car loans allow you to do whatever you want to your vehicle. You’ll never be punished for putting too many miles on your vehicle or causing wear and tear to the car. However, leasing your car puts strict restrictions on what you can do to your vehicle. If you put too much wear and tear on the car, the leasing company could punish you with excessive fees. Leasing companies also restrict the number of miles you can drive each year (usually 12,000 or 15,000 per year), and if you exceed that limit, you’ll be charged with extra fees. If you wish to customize your vehicle by adding accessories to it, such as anew stereo, exterior accessories, etc., you should probably choose to get a car loan instead of leasing. With a car loan, the vehicle is yours, and you can do whatever you wish to it. Because the leasing company owns the vehicle when you lease it, you usually can’t do much customization to the car. Any customization you might be allowed to do will have to be undone when you return the vehicle at the end of the lease. At the end of the day, it all boils down to what you’re looking to get out of your vehicle. If you’re someone who swaps out vehicles every few years, perhaps an auto lease is right for you. However, if you want to own your vehicle and eventually stop paying monthly car payments, then it’s a good idea to start shopping for auto loans. The choice is yours! Category Finance Author Anonymous Add To Favorites Print This Article Email Article To A Friend Post Comments   Rate This Article (0) 1 - Poor2345 - Good678910 - Excellent Added On Wed Nov 18th,2009