Buying vs Leasing Cars

You own the vehicle and get to keep it as long as you want it.

• Buying

• Leasing

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Which option allows you to drive a new car every few years without the hassle of selling it?

• Buying

• Leasing

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What is the term for paying a monthly fee to use a vehicle for a set period?

• Buying

• Leasing

Which option typically requires a larger down payment and results in ownership?

• Buying

• Leasing

What is the term for the contract between a car owner and another party that allows the latter to use the car for a specific time period?

• Lease

• Loan Fee

• Lessee

• Lessor

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1. Magda is going to finance her car purchase using an auto loan. Which statement below is accurate?

• Her principal is the cost of the car, minus any down payment she makes
• Her interest rate is the total cost she’ll pay after making all of her principal and interest payments
• Choosing a shorter term means it will take her longer to repay the loan
• It’s likely that her monthly payment will be between 4-5% of the cost of the car

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You can sell or trade in your vehicle at any time. If necessary, money from the sale can be used to pay off any loan balance.

• Buying

• Leasing

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On the plus side, its future value doesn’t affect you financially. On the negative side, you don’t have any equity in the vehicle.

• Buying

• Leasing

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Most contracts hold you responsible. You’ll have to pay extra charges for exceeding what is considered normal wear and tear.

• Buying

• Leasing

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The vehicle is yours to modify or customize as you like, although doing so may void your warranty.

• Buying

• Leasing

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