The primary difference between leasing and financing is in the ownership of the car. While you are financing a car, the lender holds a lien against your car. At the end of your payment term, you own the car free and clear. Every finance payment you make builds equity in the car and takes you one step closer to outright ownership of a paid-off asset.
Leasing and financing are the two methods by which most people purchase a new car. Both involve making monthly payments, and in both cases an outside company has a stake in the vehicle. This means that they have an interest in protecting that vehicle, and it does relate to how your car is insured. Insurance Rates.
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Leasing Personal contract hire PCH You pay the dealer a fixed monthly amount for the use of a car, with servicing and maintenance included, as long as the mileage doesn’t exceed a specified limit..
For those who think solely in terms of monthly payments, a $0 monthly payment at least some of the time is pretty attractive. DO THE MATH. Here’s a comparison of leasing and buying the same car .