Should I Lease or Finance My New Car?

December 12th, 2023 by

Is it Better to Lease or Finance a Car?

lease or finance a car

Getting a new vehicle is always an exciting venture; however, the looming question is whether you should lease that new car or finance and buy it. Both are great options for car buyers to have, but ultimately the decision comes down to three main factors: the amount of money you’re willing to spend, the miles you expect to drive, and the purpose of the vehicle. 

Continue reading to learn if you should lease or finance a car, as well as the advantages and disadvantages of both options. 

Financing vs. Leasing: What’s the Difference? 

Understanding the difference between financing and leasing a vehicle will help you determine which option is a better fit for your lifestyle. Let’s take a closer look at the main difference between these two options. 


Financing a vehicle with a conventional car loan is pretty straightforward — you borrow money from a bank or credit union and make monthly payments for a set amount of years. However, just like other types of loans, you must agree to pay back the amount you borrowed as well as the additional interest and fees. The appeal of financing a car rather than leasing, is that you are the owner of your car, rather than with leasing where you are paying to “borrow” a vehicle. 

To obtain financing, the financial service provider will check your credit report and credit score. If your credit score is high, you’ll be more likely to be approved for an auto loan and could secure a lower interest rate. However, if your credit score is on the lower end, you can still get approved but may end up having to pay a higher interest rate. 


Leasing a car allows you to obtain a vehicle from a dealership for an agreed amount of time and miles — while paying for its usage rather than for the full purchase price of the vehicle. Essentially, when leasing, you agree to make monthly payments based on the car’s projected depreciation value over the course of the lease term — without having the responsibility of full ownership. 

Think of leasing a car like renting a home or apartment. You pay a monthly fee for the set time that you use it and then move out (or, in this case, give the car back) unless an offer to purchase is extended. Similar to financing, you will need a good credit score to lease a vehicle. According to NerdWallet, there is no magic number that gets you approved, but the typical minimum score for most dealerships is 620 — with a score of 680 to 739 being considered ideal for dealerships. 

Pros and Cons of Financing

There are many pros to financing your prospective vehicle — after all, it’s the most common and straightforward way to purchase a car. Let’s take a closer look at the pros and cons of financing your new vehicle. 


  • You build equity on the car.
  • Once the loan payments are complete, the car is paid off.
  • You can sell the vehicle or trade it in for a new one.
  • Your insurance rates may be lower.
  • You can modify the vehicle any way you’d like.


  • Higher monthly payments.
  • You need a down payment (whether that be a trade-in or cash).
  • Your vehicle’s value will depreciate immediately after purchase. 
  • Maintenance costs will increase as the car ages. 

Pros and Cons of Leasing

When you lease a vehicle, you are not declaring ownership of the vehicle — instead, you are paying monthly to “rent” it. This option is desired by car buyers because it allows them to get a new car every few years and removes the pressure of selling said vehicle when the lease is over.  Pros and cons for leasing include: 


  • Lower monthly payments.
  • Smaller down payments are needed.
  • Lower maintenance expense (car is likely covered by a maintenance plan or warranty).


  • You cannot make modifications to the vehicle.
  • You will have mileage restrictions.
  • You won’t build equity on the vehicle and must give it back once the lease term is up. 
  • You can’t break the lease without a penalty.
  • Once the lease expires, you are left without a vehicle unless you opt to buy out your lease. 

Which Option Is Right for Me? 

Ultimately, the decision to lease or finance a car is completely up to you and your personal preference. In general, leasing payments are lower than financing payments; however, you don’t have the peace of mind of owning your own vehicle. Additionally, with leasing, you’ll have to give the car back at the end of the lease term, leaving you without a car. 

While most car buyers plan to fully own their vehicle, having the option to lease a car is great for those who only need a vehicle for a set period of time or want the most up-to-date model without having to pay the full sticker price. On the other hand, financing allows you to own an asset and build equity. 

Finance or Lease Your Next Vehicle at Battleground Kia

We hope that this blog served as a helpful resource as you begin your research on whether to lease or finance a car. As with all major purchases, it’s of the utmost importance that you do thorough research into all of your options. If being the rightful owner of a vehicle and not having any restrictions, such as mileage and modifications, is important to you, then financing may be your best option. However, if you only need a vehicle for an extended period of time or only want the latest model, leasing could be the option for you! 

Whatever route you decide to take, Battleground Kia will make sure you drive off of our lot a satisfied customer! Use the button below to contact our dealership so you can take the first step to getting your dream vehicle.

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