Financing vs Leasing: Which One is for You?

It's finally time to get a new or preowned Hyundai. But you're a little confused. You can't decide if you want to lease or finance your vehicle. Maybe it's because you don't really understand what the difference is between the two terms. Don't worry, we've got your back.

What Happens When You Finance a Car?

When you finance a car, it means you own the car. You pay for the entire cost of the vehicle, regardless of how many miles you drive each year. You typically make a down payment and pay sales taxes in cash.

If you used a loan, you'll pay an interest rate determined by the loan company. That interest is based on your credit history. You make your first payment a month after you sign your contract. Later, you may decide to sell or trade the vehicle for its depreciated resale value.

What Happens When You Lease a Car?

When you lease, you pay for only a portion of a vehicle's cost, which is the part that you "use up" during the time you're driving it.

Sometimes, you have the option of not making a down payment, you pay sales tax only on your monthly payments (in most states), and you pay a financial rate, called money factor, that is similar to the interest on a loan.

You may also be required to pay fees and possibly a security deposit that you don't pay when you buy. You make your first payment at the time you sign your contract - for the month ahead.

At lease-end, you may either return the vehicle, or purchase it for its depreciated resale value.

When making a 'lease or buy' decision, you must look not only at financial comparisons but also at your own personal priorities - what's important to you.

Contact us
today at (443) 244-4794 and let us help you make the best decision for your situation!