Benefits Of Car Leasing Vs Buying: A Comparative Analysis


Whenever automotive consumers find the need for a vehicle, the very common problematic situation that most of them tend to face is making a choice between the presently available buying and leasing options. Even though both options tend to fulfill their needs instantly, the question remains the same among most of the car consumers – which is better between leasing and purchasing a car?

If you are also one among those confused consumers who would wish to find a precise answer to this very question, here’s just what the doctor ordered!

Difference between Buying and Leasing

Buying a car simply means procuring a vehicle of your own choice by giving out full money to the respective authorized vehicle dealer, and becoming the sole owner of the car. On the other hand, leasing a car won’t make you the sole owner of the vehicle that you lease, but you would be allowed to use the leased vehicle for a particular duration by paying a fixed amount of money on monthly basis for the duration of the lease period.

The consumers are also required to pay certain amount of initial down payment, which depends upon the vehicle they choose to lease. Buying is the most common practice used by consumers who are in need of a vehicle for their own use throughout the life-time of the car, but leasing is a practice that is widely utilized by business owners as a cost effective means to fulfill their transportation needs.

In simple terms, buying is like a permanent agreement between a consumer and the vehicle dealer for the life-time of a car, while leasing is nothing but a contractual agreement between lessee (user) and lessor (owner) that allows the user to gain access to use a vehicle only for a particular predetermined period.

When to Lease and When to Buy?

For all permanent transportation requirements, buying is the best option as opposed to leasing, while for short-term hauling needs, the condition is simply reverse due to financial benefits of leasing. When you choose to buy, you are required to forfeit the total price of the vehicle, irrespective of how long you use it, or how many miles you wish to drive it.  So, here are 4 benefits of car leasing over an outright purchase –


 New car purchase is more like a one-time deal in which, you have no option to back out.  On the other hand, if you need the car only for couple of years, or you’re someone who loves to change his/her car every couple of years then leasing gives you that flexibility.

Lower Equated Monthly Installments

In practice, if you choose to purchase a vehicle through finance, then normal monthly payments tend to be a lot higher as compared to monthly lease payments.

No Upfront Burden of Down Payment

When you opt to lease a vehicle, you are supposed to reimburse only a small fraction of the total price of the car. Leasing could be referred to as a type of financing, but it can’t be called as renting. In leasing, you have an option of almost eliminating down payment, and you need to pay vehicle sales taxes only on the monthly payments, and  you also need to shell out a financial interest rate known as “money factor”, which works quite similar to that of interest calculations in case of a vehicle loan.


On the whole, both buying and leasing have their own advantages and disadvantages, but the selection primarily depends entirely on one’s transportation needs and buying preferences as well as the personal finances.


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