Leasing Vs. Financing

When You Lease Monthly Payments

Monthly lease payments are usually lower than monthly finance payments because you are paying only for the vehicle's depreciation rather than the full purchase price during the lease term, plus rent charges (like interest). Alternatively, you can lease a more expensive vehicle for the same monthly payment as financing.

When You Lease Vehicle Return

You may return the vehicle at the lease end, pay any end-of-lease costs, and "walk away."

When You Lease Future Value

The lessor has the risk of the future market value of the vehicle. You generally have the opportunity to gain any vehicle equity.

When You Lease Up Front Costs

Up-front costs of leasing a vehicle are usually less than up-front financing costs. They typically include the first month's payment, a refundable security deposit, registration fees and sometimes local taxes. Up-front costs can include:

• Capitalized cost reduction
• Taxes
• Other government or lessor charges
• Optional insurance and services
• First monthly payment
• Refundable security deposit
• Prior lease balance
• Prior credit balance

When You Lease Total Costs

The total costs of leasing a vehicle for a fixed period are generally less than for financing because of lease savings on depreciation and gap coverage; less sales tax; and the time value of money benefits.

• Depreciation
• Gap coverage
• Sales/Use tax
• Time value of money