Should I Lease Or Finance My New Vehicle?

When it’s time to invest in a new vehicle, you’ll have some options for how you’d like to pay for the vehicle. Leasing and Financing vehicles are very popular ways to obtain vehicles, each method with its own specifics. Take a few moments to read the information below to learn about the pros and cons of leasing and financing vehicles.



  • Lease. When you lease a car, you don’t own the car outright. Instead, you pay to use the car for a fixed period of time. At the end of the lease term, you can either purchase the car or return it.
  • Finance. When you finance a car you are purchasing the vehicle, which means you own it. You can drive it as much as you want, and add any customizations you’d like and sell it at any time. You are the owner, after all.



  • Lease. The upfront fees involved in a lease are typically include the first month’s payment, a refundable security deposit, down payment, taxes, registration fees, and possibly other fees.
  • Finance.  When you finance a car, the upfront fees involved are usually the cash price or a down payment, taxes, registration fees, and possibly other fees.


  • Lease. Monthly payments for a lease are almost always lower than monthly payments for a loan (financing). With a lease, you only pay for the depreciation of the vehicle during the time of the lease, plus interest, rent charges, taxes, and other fees.
  • Finance. When you finance your car with a loan, your monthly payments will generally be higher than with a lease because you are paying off the entire value of the vehicle, plus interest, taxes and possibly other fees associated with your loan.



  • Lease. When you lease a car, it is best to plan on staying in the lease for the entire duration. If you decide to end your lease early, which is called Early Termination, you will have to pay an Early Termination Fee, which can sometimes be just as much as the total cost of the remainder of the lease.
  • Finance.  When you finance a vehicle, you can sell or trade your vehicle at any time, because you own it. If you sell your car, you can use the profit you make from the car to pay off the remainder of your loan.



  • Lease. When your lease term is over, you can simply return your car to the dealership, and walk away after paying any end-of-lease fees.
  • Finance.  When you finance your car it is your responsibility to sell or trade in the car if you want to buy a different car.



  • Lease. The future value of the car you lease does not affect you as the lessee. However, you won’t gain any equity from the vehicle because you do not own it and will have to return it when your lease term is finished.
  • Finance. When you finance a car, the value of your vehicle will depreciate. However, the equity will be yours.


  • Lease. When structuring your lease, you will negotiate an annual limit on how much you can drive the car. You will have a certain number of kilometers you can travel, and if you go over the amount agreed upon, you will incur extra charges.
  • Finance. When you finance a car, since you own the vehicle outright, you can drive it as much as you’d like, with no limit on how many kilometers you travel. As a car owner it is important to remember that the more kilometers the vehicle has been driven, the lower its resale value will be.


  • Lease. If your car endures excessive wear and tear or is damaged in any way, you as the lessee will typically be required to pay for its repair.
  • Finance. When you finance a car, the main concern for wear and tear is that it lowers the resale value. As the owner of the car you will be responsible for any damage done to the car and will need to pay for any repairs.



  • Lease. When you lease a vehicle, the person/business you are leasing it from will require that it be in optimal condition for resale. At the completion of a lease term, any and all modifications and/or customizations will need to be removed or restored back to original condition. If any damage occurs as a result of customization or modification, you as the lessee will be required to pay for the car to be restored back to its original condition.
  • Finance. When you finance a car, you own the car so you can do whatever you want to it. You can customize and modify your car as you please, while keeping in mind the effect the changes will have on its resale value.


Whether you want to lease or finance a car really comes down to personal preference. When deciding which is right for you, try to keep your long term intentions in mind. If you’re the type of person who likes having a brand new car every few years, then leasing is a much better option financially. If you intend to purchase a car and drive it until it dies, then taking out a loan to finance your car is a better option.

When you decide it’s time for a new Toyota car, truck, SUV or minivan, the finance team at Georgetown Toyota can help you make the best educated decision that will perfectly suit your needs.