You have probably set your heart on a brand new car and have decided to bring it home. There is just one thing standing in the way, and that is the process of making the payment. Now, this probably brings to mind a major question: What are the pros and cons of financing vs. leasing a vehicle?

If you are confused between the two, do not worry. To help you out, here are the most important pros and cons of financing vs. leasing a vehicle, that you must keep in mind.

Pros and cons of financing

The pros of financing a car include:

• Freedom to customize : If you feel like changing the color of your vehicle or making any modifications, you can do so as the car is yours. This freedom can help you make the most of your vehicle.
• Unlimited miles : Unlike with a leased car, there is no cap on the miles you can drive when you own the car. This works great if you like to take long road trips.
• Pride of ownership : Needless to say, if you buy a car, it is truly yours. This pride of ownership comes with a sense of freedom that is missing when you lease a car.

The cons of financing a car include:

• Costlier payments : The monthly payments for a financed car are much higher than that of a leased car. You would be wise to calculate how much extra you would be paying, and if you will keep the car long enough to justify this amount.
• Responsible for selling the vehicle : If you choose to buy another vehicle, the onus of selling the financed car comes onto your shoulders. Keep in mind that the value of cars depreciates. So, selling a used car is a tough task.

Pros and cons of leasing

The pros of leasing a car include:

• Lesser monthly payouts : The monthly payments for a leased vehicle are way lower than those of a financed car. Also, you do not have to pay the sales tax. So, you are saving money when you lease a car.
• Barely any repair costs : Your leased car will usually come covered with a warranty by the manufacturer, so you stand little chance of getting a big bill for repairs. You would still need to pay up for insurance.

The cons of leasing a car include:

• Extra charges : If you return the car before the lease expires, you will be charged more money than the actual cost of your lease.
• Stricter maintenance : Since the car has been leased out to you, you need to be particular about returning it to the company in mint condition or risk being charged extra.
• Limited driving : You get your lease car with a fixed number of miles. If you exceed this, you have to pay up.