Are you browsing the exciting new 2024 lineup but wondering whether leasing or financing is best for you? You're not alone. It's a common dilemma, but we're here to help. Understanding the nuances of car leasing and financing is important to ensure you're making a financially savvy decision, as it can ultimately impact your financial situation and overall driving experience. 

So, which is best? There's no one-size-fits-all answer. It depends on how you drive, your budget, and what you plan to do. In this article, we'll explore the differences, benefits, and considerations of each to help you make the best choice for your needs. You can also apply for financing at Bountiful Mazda online today to get an idea of your options. 

What's the Difference Between a Lease and Financing?

When it comes to acquiring a vehicle, you have the option to lease or finance (buy) it. Each option has its own set of pros and cons: 

Leasing

When you lease a car, you're essentially renting the car from the dealership for a set time. 

• Term: 24 to 48 months. 
• Monthly costs: Lower monthly costs than financing as you only pay for the car's depreciation (how much the car's value goes down) during the lease term. 
• Mileage limits: Often come with mileage limits (e.g., 12,000 miles per year) with additional fees if you exceed them. 
• Warranty: Usually under warranty for the duration of the lease, which means many maintenance costs are covered. 
• End of lease: Car returned to the dealership at the end of the lease, with an option to buy it at its estimated value (residual value) or start a new lease with a different car. 

Financing

Financing means you get a loan to buy the whole car, which you then pay off over time. 

• Term: Three to six years. 
• Monthly costs: Higher monthly costs than leasing, as you're paying for the entire value of the car plus interest. 
• Mileage limits: None.
• Warranty: Covering maintenance costs yourself after the warranty expires.
• End of lease: Owning the car outright once the loan is paid off; driving, customizing, selling, or trading it in as desired. 

Let's look at a $30,000 car. If you opt for a lease agreement for 36 months, you might pay $350 monthly and can drive 12,000 miles a year. If you finance it for 60 months, you could pay $550 each month, but you'd own the car at the end. Lease agreements often include maintenance and let you drive a new car more often. Financing lets you own a vehicle and do what you want with it. 

Choosing between leasing and financing is not the same for everyone. Some people like leasing because it costs less initially, and they can switch to a new car more often. Others like financing because they end up owning the car. By understanding your options, you can pick what's best for your budget and what you need in a car.

Benefits and Considerations of Leasing 

Leasing a car means you can drive a new vehicle every few years. It often requires less money upfront and involves lower monthly costs than financing. This option suits those eager to access the latest technology and features. Many rental agreements cover maintenance, which cuts down on repair costs. Leasing can also offer tax benefits, as you're only responsible for taxes on the portion of the vehicle's value you use. If you own a business, you might deduct lease payments from your taxes. 

However, most leases limit how many miles you can drive. If you go over, you'll have to pay additional fees when you return it. You'll also pay fees for too much wear and tear. Unlike owning a car, leasing doesn't build value. It's like renting a high-end car for a while and can be more costly than buying and keeping a car for a longer period. 

Benefits and Considerations of Financing

Buying a vehicle has its benefits. The main one is that the car is yours once you pay it off. You can drive, modify, and sell it however and whenever you want. If you keep the car for a long time after you finish paying for it, you might even save money. When purchasing a vehicle, you can build equity, which is beneficial if you decide to sell or trade it in later. 

However, buying comes at a higher upfront cost than leasing, requiring a larger down payment during the finance application process. Loan payments are usually higher because you're paying for the car's entire value. After the initial warranty expires, you're responsible for all maintenance and repair costs, which can add up as the car ages. It also loses value over time — at first, you might owe more than the car is worth.

Which Option Is Right for You?

When choosing between leasing and financing a car, consider your driving habits, financial situation, and long-term plans. Below is a guide to help you make an informed decision.

Miles Driven on a Yearly Basis 

• Less than 12,000 miles: Leasing could be suitable. 
• More than 15,000 miles: Financing might be a better option. 

Monthly Budget for Car Payments 

• Lower monthly budget: Leasing might be more affordable. 
• Higher monthly budget: Financing could be manageable. 

Affordability of a Large Down Payment 

• Yes: Financing could be viable. 
• No: Leasing may require less upfront. 

Desire for Eventual Ownership 

• Yes: Financing is the right choice. 
• No: Leasing provides flexibility without ownership.

Interest in Driving the Latest Models 

• Yes: Leasing allows frequent upgrades. 
• No: Financing lets you keep the car longer. 

Need for Vehicle Customization 

• Yes: Financing is preferable. 
• No: Leasing can work if customization isn't important. 

Planned Duration of Vehicle Use 

• Short-term (2-4 years): Leasing fits this timeframe. 
• Long-term (5+ years): Financing is more cost-effective. 

Get Expert Advice at Bountiful Mazda Today

Deciding whether to lease or finance a car can be challenging. At Bountiful Mazda, our financial experts are available to help guide you through the pros and cons. We can provide personalized advice tailored to your circumstances, budget, and credit score. Contact our Bountiful Mazda finance team to seek expert guidance about the most suitable options and lease deals for your dream car.