What's the Difference Between Financed and Leased?

The main difference between leasing and financing a car is that with a lease, you never own the vehicle and must return it to the dealer when the lease is up. When financing a car, you make payments until you pay the car off.

Is it better to finance or lease a car?

If your main goal is to get the lowest monthly payments, leasing could be your best option. Monthly lease payments are typically lower than auto loan payments, because they're based on a car's depreciation during the period you're driving it, instead of its purchase price.

Is it better to lease than finance?

The monthly payments on a lease are usually lower than monthly finance payments if you bought the same car. With a lease, you're paying to drive the car, not to buy it. That means you're paying for the car's expected depreciation — or loss of value — during the lease period, plus a rent charge, taxes, and fees.