Auto Loan vs Lease: Buying vs Leasing Comparison Guide
Understand the financial differences between buying a vehicle with an auto loan versus leasing: monthly payments, mileage caps, equity ownership, and residual value.
By Sarah Jenkins, CFA
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Reviewed by David Vance, CFP
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5 min read
Buying vs Leasing: Core Trade-Offs
| Feature | Auto Loan (Buying) | Auto Lease (Leasing) |
|---|---|---|
| Vehicle Ownership & Equity | 100% Equity Ownership after payoff | Zero equity (Vehicle returned to dealer) |
| Monthly Payment Amount | Higher Monthly Payment | 30% – 40% Lower Monthly Payment |
| Mileage Restrictions | Unlimited miles | Strict 10,000 – 15,000 annual mile caps |