Hey! I’ve been thinking about getting a new car and this would be my first time getting one so i don’t really know all the ins and outs. I really just wanted to come on here and ask what the difference between leasing and financing is. And any other advice on getting a car is welcome but not necessary. thank you!!
In: Economics
Leasing has a lower monthly payment than financing, and generally a shorter period of 2-3 years. You are essentially renting a brand new car, and there are restrictions on mileage limits etc. At the end you give back the car, although you often have the option of purchasing it at a more favorable price than it will be advertised for to everyone else. Often you also have less maintenance to pay for (depending on the deal).
Financing is taking out a loan, usually through a bank affiliated with the dealership. You can come in with your own financing though. But sometimes there’s a promotional interest rate that’s favorable. You pay the price of the car plus interest over the life of the loan and at the end you own the car. You can get a new or used model as well.
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