Congratulations!  You built your credit up and now it’s time for you get a car!  With financing and leasing being the most popular options, which is the best way to go?  I went through the pros and the cons of each to give you insight on what can be the best route for you.

Pros of Financing:

  1.  Allows you to buy a car without paying the full price up front.
  2.  You have no restrictions on the amount of miles you put on the car
  3.  After you pay off the car, you own the vehicle and can sell it for the market price or trade in for the value of the car towards another car.

Cons to Financing a Car:

  1.  The car loses value quickly from the moment you drive it off the lot.
  2.  Limited tax advantages
  3.  You’ll end up paying the full price of the car plus interest while owning a depreciating asset.

Pros to Leasing:

  1.  Leased vehicles offer businesses tax benefits including write offs for a percentage of monthly payments and the down payment.
  2. Lower monthly payments than most financing options.
  3.  Low maintenance cost since the cost are usually covered by warranty and maintenance plan.

Cons of Leasing:

  1. Restrictions of how many miles you use per year.  The lower the mileage agreement, the lower the lease payment.
  2.  Once you finish the lease, you have to return it after for years of payments.
  3. You can’t modify a lease agreement without paying a penalty.


Whether you finance or lease a vehicle, you’ll end up losing a majority of the value of the car.  Being that a car depreciates in value every year, you are losing money and paying interest on a liability.  Most people are never able to sell a car without carrying over a balance of what they owe for the car.  To get the best outcomes with cars, buy cash.  Buy a later model car that you can buy cash and then trade up as you can afford more.  This way you avoid being in a cycle of losing money on financial agreement designed for you to lose. 0% to drive it off the lot is a lot to pay!