Nothing quite compares to the freedom of having your own set of wheels. It gives you the ability to go wherever you want, whenever you want. Not much can beat that feeling of climbing into your brand new car that still has that “new car” smell. The biggest setback to getting your new car is paying for that car and the method of doing so. Luckily, there are a few different options to make your new car dreams come true.

Let’s dive into the benefits of leasing a vehicle versus financing a vehicle:

1. Monthly payments

Both options will require monthly payments and both have their own unique benefits. When you lease a vehicle, you will generally have lower payments and won’t end up paying more than what the vehicle is worth because payments will be centered around the depreciation or loss of value of the vehicle. When you finance a vehicle, you may have higher monthly payments but are building up equity and value over time. You get what you put into it. Whereas when you lease, you’re paying to use it and won’t have anything to show for it in the end, or you can see it as a “no strings attached” method and a means of financial freedom. It all truly depends on your financial needs and preferences.

2. Maintenance and mileage

If you aren’t savvy when it comes to car repairs, leasing might be a better option because maintenance falls on the manufacturer through the new-car warranty that’s provided. The older the car gets, the more likely it will need repairs and if you are leasing you don’t have to worry because you can finish your lease term (typically 1-3 years) to get a newer model. When you finance a vehicle, you don’t have that luxury, but you do have the freedom to do what you want with your car and customize it. Constant upkeep only has to be maintained if you lease the car and have to return it. Now, if you like to drive long miles, then financing a car outright might be better because you won’t have a limit on your mileage, unlike leasing.

3. Owning and borrowing

When you strip it all away, financing a vehicle or leasing a vehicle can easily be described as owning versus borrowing one. When you get a car loan and pick out your new ride, you are buying that car to become your property. Although there has to be a credit check and higher payments, you’ll be working towards having the freedom to do what you want with it and will own something that has some value. You are also not locked into a fixed agreement and can trade in that car anytime. When you lease a car, you are borrowing dealership property. You have the freedom to get places at a lower monthly cost, but you are set within the contract for a fixed period of time.

Both methods have their pros and cons, but there is not one method better than the other. Ultimately, it depends on your lifestyle and personal taste. Some may dislike having the responsibility that comes with owning a car and prefer that unique type of freedom from leasing. Some may want to build up equity and work towards having something of value to use instead. Explore your options first and think of what will work best for you.