 | LEASING You do not own the vehicle. You get to use it but must return it at the end of the lease unless you choose to buy it.BUYING You own the vehicle and get to keep it at the end of the financing term. |
 | LEASING Up-front
costs may include the first month's payment, a refundable security
deposit, a capitalized cost reduction (like a down payment), taxes,
registration and other fees, and other charges.BUYING Up-front costs include the cash price or a down payment, taxes, registration and other fees, and other charges. |
 | LEASING Monthly
lease payments are usually lower than monthly loan payments because you
are paying only for the vehicle's depreciation during the lease term,
plus rent charges (like interest), taxes, and fees.BUYING Monthly
loan payments are usually higher than monthly lease payments because
you are paying for the entire purchase price of the vehicle, plus
interest and other finance charges, taxes, and fees. |
 | LEASING You are responsible for any early termination charges if you end the lease early.BUYING You are responsible for any pay-off amount if you end the loan early. |
 | LEASING You may return the vehicle at lease-end, pay any end-of-lease costs, and "walk away."BUYING You may have to sell or trade the vehicle when you decide you want a different vehicle. |
 | LEASING The lessor has the risk of the future market value of the vehicle.BUYING You have the risk of the vehicle's market value when you trade or sell it. |
 | LEASING Most
leases limit the number of miles you may drive (often 12,000-15,000 per
year). You can negotiate a higher mileage limit and pay a higher
monthly payment. You will likely have to pay charges for exceeding those
limits if you return the vehicle.BUYING You may drive as many miles as you want, but higher mileage will lower the vehicle's trade-in or resale value. |
 | LEASING Most
leases limit wear to the vehicle during the lease term. You will likely
have to pay extra charges for exceeding those limits if you return the
vehicle.BUYING There
are no limits or charges for excessive wear to the vehicle, but
excessive wear will lower the vehicle's trade-in or resale value. |
 | LEASING At
the end of the lease (typically 2-4 years), you may have a new payment
either to finance the purchase of the existing vehicle or to lease
another vehicle.BUYING At the end of the loan term (typically 4-6 years), you have no further loan payments. |
Source: Federal Reserve Board
