Gone are the days when buyers had to pay the whole sum in one go to buy a car. With leasing becoming more common and comfortable, most people have an option to give a sticker amount when making a booking and pay the remaining amount in installments. Leasing also takes depreciation into consideration, along with the interest and fee.

Leasing also has several advantages over financing a car. Let’s take a look at some of the pros and cons of financing vs. leasing a vehicle and why leasing is so popular:

Reduced monthly payments
As compared to financing a vehicle, leasing lets an individual pay the difference between the cap price of the car and the depreciated value after the tenure, making the monthly payments lower than the ones involved in financing a car with installments. At the same time, it isn’t wise to judge the installments without considering the monthly budget. Leasing a car helps in going for a better car with better options when put against buying a car.

Access to the latest technology
For a car to have the latest technology, including advanced safety features with driver assistance and cruise control with automatic emergency braking, one needs to own the latest car. For someone looking to own a car with the latest technology but falling short of the required funds, weighing the pros and cons of financing vs. leasing a vehicle prove that leasing is the most practical option. It also lets the buyer avoid the depreciation cost and helps them opt for a car that offers better fuel economy than similar models a few years older.

Maintenance and warranty
Most sellers also cover leased vehicles for the lease period. Since the term of a lease is either 2 or 3 years, the dealer will not have any issues for providing a warranty. Another major advantage of leasing a car is that the buyer need not worry about the expensive repair costs involved in owning a car since the dealer takes care of it all, provided they’re due to general wear and tear.

Trade-in
When the tenure is over, the lessee simply has to approach the seller and settle the final payment, but these may also include charges for excess miles driven or any excess wear and tear. Additionally, the buyer can drive away with a new car with the latest technological additions, which is not always possible with financing a vehicle.

Sales tax
The pros and cons of financing vs. leasing a vehicle also depend on the location of the buyer, but leasing a car can save a tremendous amount of money involved in paying the sales tax. In some jurisdictions, the tax is only the amount paid as the token fee and the monthly installment with regard to the tax paid on the entire cap cost of the car, which makes a huge difference. Besides, the down payments involved in the form of sticker price are very low as compared to financing a car.