Ownership: When you finance a car, you own the vehicle once the loan is paid off. When you lease a car, you do not own the vehicle - you are essentially renting it for a set period of time (usually two to three years).
Monthly Payments: Lease payments are generally lower than loan payments because you are only paying for the depreciation of the vehicle during the lease term. Loan payments, on the other hand, are generally higher because you are paying for the full value of the vehicle.
Mileage Restrictions: When you lease a car, you will typically have a mileage limit (usually between 10,000 and 15,000 miles per year). If you exceed this limit, you will have to pay an additional fee for each mile over the limit. There are no mileage restrictions when you own the vehicle.
Upfront Costs: When you lease a car, you will typically have to pay a down payment, security deposit, and other fees upfront. When you finance a car, you may have to make a down payment, but you won't have to pay a security deposit or other fees.
Customization: When you own a vehicle, you can modify it however you like. When you lease a vehicle, you generally cannot make any modifications.
End of Term: When your lease term is up, you can either return the vehicle and lease a new one or buy the vehicle at its residual value. When your loan term is up, you own the vehicle outright and can either keep driving it or sell it.