The Confusion Between Buying and Leasing a Car

When you are new car shopping, you have the choice to either buy or lease a car. The question may stop you in your tracks. What's the difference between the two? There are actually a few advantages of both buying and leasing. Choosing one is dependent on your own circumstances. Here's what you need to know about the difference between buying a car and leasing one.

By the way, Earnhardt Auto Centers has 21 dealerships covering 17 brands. So we know a thing or two about new car sales. We also have a large used car inventory for sale that is accessible online.

The Concept of Ownership is Different

Buying a car means that you eventually will own it. You'll likely need a car loan in order to afford the car initially. You pay back the loan, along with interest, until you've completely paid the car loan off. Once that happens, the car is entirely yours.

Leasing a car, on the other hand, means that you're only paying to use the car for a certain amount of time. You never technically own the car. A car lease is useful for those who don't want to deal with the inevitable mechanical problems that a car will undergo.

Buying a car means that you'll need to pay for those costs as the car ages. Leasing one means you only have to deal with a few minor mechanical errors before you can get your hands on another car.

The Duration of Ownership is Different

When you buy a car, you own it immediately. Most contracts only require you to own it for a year before you can resell it. While you're paying the car loan back, you're still technically the owner of the car during that time. You can own it for as long or as short of a time as you want.

When you lease a car, you only have possession of it for a set amount of time that's based on the car lease. That's usually around two or three years. You can renew the lease if you find that you enjoy the car. Or you can get a new one.

Monthly Payments Can Differ

No matter if you have a loan or lease, you're going to be paying for the car. When you buy one, you'll likely have higher payments. You may also need to have a larger down payment if your credit score isn't ideal. A poor credit score may require you to have second-chance financing, but that’s available at Earnhardt Auto.

Leases require a little-to-none downpayment and typically have smaller monthly payments as well.

Choose the Option Best For Your Needs

Whether you lease or buy a car is dependent on your needs, budget, and whether you want to stick with one car for several years or enjoy trying out different makes and models. Find your new car in our multi-brand online inventory.