Finance & Leasing FAQs

The main difference comes down to ownership and monthly payments:

• A Car Loan (Financing to Own): When you finance a vehicle, your down payment and monthly payments go toward the total purchase price of the vehicle. Once your loan is paid in full, you own the vehicle outright and receive the title.
• A Car Lease (Paying for Usage): Leasing is similar to renting the vehicle for a set period (typically 24 to 39 months). Instead of paying for the entire value of the car, you only pay for the portion of the vehicle’s value that you "use" (the depreciation) during the lease term. At the end of your lease, you can choose to return the vehicle, trade it in for a new one, or buy it outright.

The right choice depends on your driving habits, budget, and personal preferences.

• Choose a Loan if: You plan to keep your vehicle for a long time (five years or more), want to customize your vehicle, or want to build long-term equity with no mileage restrictions.
• Choose a Lease if: You love driving a new car every few years, want lower monthly payments, prefer staying under a factory warranty, and want the latest technology and safety features.

An auto loan is a set amount of money you borrow from a lender to purchase a vehicle. You agree to pay back the borrowed amount (the principal) plus interest over a specific period of time (the term, usually 60 to 72 months). Until the loan is paid off, the lender holds a lien on the vehicle’s title. Once you make your final payment, the lien is released, and the title is sent to you.

Yes, it can! A common misconception is that high-mileage drivers shouldn't lease. The truth is, you pay for mileage regardless of whether you buy or lease.

• If you buy a car and drive 25,000 miles a year, the vehicle will depreciate rapidly, significantly lowering its trade-in value when you want to sell it.
• If you lease, you can customize your lease agreement upfront to include 15,000, 18,000, or even more miles per year.

It is important to remember that a vehicle is a depreciating asset—meaning its value goes down over time as you use it. Unlike a home or a stock portfolio, a car is a practical, lifestyle expense rather than a wealth-building investment.

To minimize this ongoing expense, many savvy drivers follow the famous philosophy of industrialist J. Paul Getty: "Buy what appreciates, lease what depreciates." By leasing, you avoid the long-term risk of depreciation and only pay for the exact portion of the vehicle's life that you actually use.