What I Learned From Financing One Car and Leasing the Next
I’ve done it both ways. I financed my first “real” car fresh out of college—big purchase, big commitment. A few years later, I tried leasing a shiny new compact SUV because I wanted low payments and less stress.
Turns out, each option comes with its own set of surprises.
If you’re wondering whether to lease or finance your next car, I’ve got your back. Here’s what I learned from trying both—and how to figure out which route could save you more in the long run.
Financing vs. Leasing: Let’s Break It Down
Whether you’re eyeing a new ride for practicality or just want something that still smells like the showroom, the first decision is a big one: buy it or borrow it?
Let’s start with what each path actually means—and what I discovered along the way.
What Financing Taught Me: Ownership Feels Good (Eventually)
When I financed my sedan, it felt like a big deal. I was officially a car owner in the making, and every monthly payment was one step closer to full ownership.
Here’s what stood out:
1. I Paid More Per Month—but It Was Mine
The monthly payments were a bit steep compared to leasing, but once I crossed that finish line (60 months in my case), I had zero car payments and a car I could drive, sell, or trade anytime.
2. No Mileage Worries
I commute a lot, and I didn’t have to think twice about road trips, weekend getaways, or long drives to see family. No overage fees, no stress.
3. Customization Was All Mine
I added a phone mount, upgraded the stereo, and even put on snow tires in the winter. When you finance, it’s your car. You do you.
4. Long-Term Wins Show Up Later
Once the loan was paid off, every month without a payment felt like a mini financial victory. And when I eventually sold the car? I put that cash right into my next one.
But it wasn’t all perfect...
5. Repairs Creep Up
After about five years, I had to start budgeting for maintenance—brakes, a new battery, some suspension work. That’s the tradeoff when you own a car long-term.
What Leasing Taught Me: New Cars, No Drama
A few years later, I gave leasing a go. I was curious, wanted lower monthly payments, and loved the idea of upgrading every few years.
Here’s what I learned from that lease experience:
1. Payments Were Lower—and That Felt Great
Leasing gave me access to a newer car for about $120 less per month than financing a similar one. It freed up my budget when I needed it most.
2. Everything Was Covered
The entire lease term, the car was under warranty. I didn’t pay for a single repair—just oil changes and a set of windshield wipers.
3. The Car Was Always “New”
I had the latest tech, the newest safety features, and—bonus—no one ever asked, “How old is your car?”
But there were some tradeoffs...
4. Mileage Limits Are Real
My lease had a 12,000-mile-per-year cap. I had to monitor it closely and skip a few road trips or split driving with friends. Overages weren’t cheap.
5. It Was Never Truly My Car
I couldn’t customize much (not even a dashboard sticker), and when it was time to return it, I stressed over every door ding and scratch. I also knew I’d always have a payment if I kept leasing.
Which Saved Me More in the Long Run?
In the short term, leasing felt easier on my wallet. But once I paid off my financed car, the tables turned—no payments for years meant serious savings.
Here’s what I figured out:
- If you plan to keep your car for 5+ years, financing will almost always cost less overall.
- If you like fresh cars and minimal hassle, leasing is flexible and low-stress—just be ready for ongoing payments.
- If you drive a lot, financing is the clear winner—no mileage limits, no overage charges.
- If you want to avoid repairs, a short lease means staying under warranty the whole time.
Tips I Wish I Knew Sooner
Whether you're financing or leasing, a few smart moves go a long way:
1. Shop Around for Rates
Credit unions, banks, and online lenders often beat dealer rates. I saved over 1% interest just by checking with my bank.
2. Always Negotiate—Yes, Even Leases
The capitalized cost (aka, the car’s price) on a lease is negotiable. The better the price, the lower your lease payment. Don’t settle for sticker.
3. Read the Fine Print
Know your mileage cap, wear-and-tear clauses, early termination fees, and buyout options. That stuff matters a lot when it’s time to turn in the car—or keep it.
4. Think Beyond the Monthly Payment
Low payments are great, but if you're just rolling leases forever, you’re always paying and never building equity. It’s like renting vs. owning a house.
Savvy Dashboard
- Leasing means lower payments and newer cars, but comes with mileage caps and no ownership
- Financing costs more upfront, but once the loan’s paid off, your car becomes a long-term money-saver
- If you drive a lot or want to customize, financing is the better fit
- If you value warranty coverage and minimal maintenance, leasing can simplify your life
- No matter what—shop around, negotiate, and know your contract details cold
So...Which Would I Choose Next?
Honestly? It depends on my life stage.
If I needed flexibility, low stress, and loved always having the latest features—I’d lease again in a heartbeat.
But if I was ready to drive something into the ground, skip payments for a few years, and keep more cash in the long run? Financing wins every time.
Bottom line: both options can be smart—if you go in with your eyes open and your numbers crunched. Just like your car, this decision should fit you.
