When it comes to purchasing a used car, there are a plethora of factors that a buyer should consider. In addition to analyzing the costs of ownership, a buyer should also take into account the value of the car they’re trying to purchase.

In general, leasing a car is the most expensive financing option — but there are specific cases where leasing can be advantageous. If you’re in the market for a used car, you’ve probably considered both leasing and financing as an option.

The answer is each has its own advantages and disadvantages, so which is the best fit for you depends on your specific circumstances.


What is leasing?

Leasing is a long-term contract where you rent a vehicle instead of owning it. Usually, you have to sign a contract for at least 36 months, but it can be up to 84 months. Leasing is most common for cars. When you lease a car, you pay an amount based on the value of the car. At the end of the lease term, you either buy the car for the amount you’ve paid in rent or return the car to the leasing company.


What is financing?

Financing a used car means paying a portion of the purchase price upfront, with the remainder to be paid through monthly payments. The amount you’re required to pay is calculated using interest rates and the length of time you’re required to pay it.

The length of time you’re required to pay depends on the type of financing you choose. If you don’t pay off the full amount of your loan, you’ll end up paying more interest, and the time period will be extended.


Pros and cons of leasing a car

Low Upfront Cost: The lease of a car doesn’t require you to purchase the car at the end of the contract. Some people choose to lease just so they can drive a new car without paying for it. However, if you finance the car, you’ll end up paying the full price of the car when it’s done.

Drive Fresh Car Every Few Years: If you lease a car, you don’t have to worry about any car issues. However, if you finance a car, it’s your responsibility to make timely monthly payments. –

No Worries about Value Drops: Since there is no purchase price, there is no risk of losing money when a car’s value drops.

No Ownership: You do not own the car during the lease. However, we often include $0 purchase option at the end of the lease so you can lease to own your vehicle.


Pros and cons of financing a car

Future Value: When you finance a car, you’re promising to pay the seller some amount of money at the end of the contract. Therefore, you can bet that the car’s future value has been estimated.

Future Monthly Payments: If you finance a car, you’re promising to pay a certain amount of money each month for a certain length of time. Therefore, you can bet that your monthly payments have been estimated.

Ownership: If all the financing sources you’ll be using (i.e. credit card, loan, bank — or a combination) all promise to finance your purchase, there will be no other sources involved.

Bulky Down Payment: If you finance a car, you’ll be required to make monthly payments on the full purchase price. Therefore, you’ll need to have a 10-30% of down payment to make finance payments affordable.



When it comes to leasing a used car or financing a used car, each has its pros and cons. Ultimately, it depends on your specific circumstances. If you’re looking to drive a new car without paying the full price, leasing might be the best option for you.

On the other hand, if you want to purchase a used car without risking a drop in the car’s value, financing a car might be the better option for you.

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