Leasing vs Auto Financing 

Deciding whether you should finance or lease your next (or first) car can be tough, but there’s a big difference between the two. While vehicle financing typically involves making higher monthly payments, you’re paying to own it. On the flipside, while leasing may have lower monthly payments, at the end of the lease term you give the vehicle back and have nothing to show for all your payments.


Auto Financing

  • You own the vehicle.
  • Monthly payments are typically higher because you are paying off the entire purchase price of the vehicle (plus interest, taxes and fees).
  • You can sell or trade in your vehicle at any time.
  • You’re free to drive as many miles as you like.
  • You don’t have to worry about wear and tear, although it could lower the vehicle’s trade-in or resale value.
  • There are no further payments at the end of the loan or financing term and you may have built equity that can go towards the purchase of your next car.



  • You don’t own the vehicle.
  • Lease payments are typically lower because you’re paying only for the vehicle’s depreciation during the lease term (plus interest, taxes and fees).
  • If you end the lease early, early termination charges can be as costly as the contract itself.
  • You can drive as many miles as you like; however, you will likely have to pay fees for miles in excess of the original millage limit of the lease.
  • Most leases hold you responsible and you’ll have to pay extra charges for what the lease deems excessive wear and tear.
  • At the end of the lease (usually two to three years), you can finance the purchase of the car, or lease or buy another.

If you’ve decided to go the auto financing route but have bad credit or no credit established, subprime auto lenders or financing companies, like Credit Acceptance, can help you get approved for your next car. Just fill out this brief form to get connected with a dealer enrolled in the Credit Acceptance program near you who can help you find your credit approval today!