Consumers who opt to purchase a vehicle will own the car at the end of the loan period, so they can keep it as long as they wish. This option involves paying up-front costs such as a down payment or the full price of the car, taxes, and registration. Consumers who finance the purchase will then assume monthly payments, which include interest, finance charges, and possibly other fees. Buying an automobile gives the owner flexibility regarding mileage, wear and tear, and customization. At the end of the loan term, the consumer can use the value of the car to help purchase a new vehicle.
Consumers who lease a car will not own it; they will merely use it during the lease term. Leasing involves paying up-front costs such as the first monthly payment, a security deposit, taxes, and registration. Leasing payments are usually less than a loan payment. The lessee must monitor mileage and wear and tear to ensure that use of the vehicle does not exceed the parameters of the contract. With leasing, the consumer will return the car at the end of the contract.
After careful consideration, the consumer can choose the purchase option that fits his individual needs.