Leasing vs. Buying with a Loan: What’s the Real Difference? When deciding between leasing a car and buying it with a loan, many shoppers assume one option is significantly cheaper than the other. In reality, when you compare the two over a similar time frame—such as three years—the overall cost is often surprisingly close. A key point to be made here is that a specific car depreciates in value by the same amount, regardless of whether it is purchased with cash, financed with

Leasing a car is a form of financing, not renting. It allows you to pay for the use of a vehicle over a fixed period—usually 24 to 39 months—and requires you to commit for the full term. Leasing became popular for consumers in the 1980s and now represents about one-fourth of new vehicle sales. Price is Key When leasing, the vehicle’s price is negotiated just like a purchase, and that price is the biggest factor affecting your monthly payment. Contrary to common belief, lease