Financing vs. Leasing

The Difference Between Buying & Leasing

Which Option Is Right For You?

After you have picked out your dream vehicle in Baltimore, MD, should you finance or lease? Let Len Stoler Ford explain the difference so you can choose the option that is right for you.

Shopping for your new or used car, truck, or SUV can be an exciting time in your life It can also be stressful when it comes to deciding how to pay for that vehicle. You may be wondering whether financing or leasing is a better option for you. It really depends on your situation. We want to take the time help you understand the difference between your options.


What is financing? Financing is when you get approved for a loan through a financial institute such as a bank or credit union. When you finance a vehicle, there is typically some sort of down payment that is required as well as a sale tax. The interest rate is determined by the lender and will depend heavily on your credit score. You pay for the entire cost of the vehicle when you finance it. Typically you will make your first payment after you sign your contract. There are also no mileage or damage restrictions when you finance a vehicle. If you fall behind on your payments, the lender has the right to repossess your vehicle so be sure to make your payments on time to avoid bad credit remarks. After you pay off the vehicle, you own it. You can choose to sell it privately or to trade it into a dealership when you purchase your next vehicle. You do have to consider depreciation when purchasing a vehicle so keep that in mind. Do you have questions or are you ready to finance? Talk to our finance experts at Len Stoler Ford today.


What is leasing? Leasing is when you pay for only a portion of the vehicle's cost. This is considered the portion of the vehicle you will use while it is in your possession. With a lease, there is often no down payment required, although providing a down payment can lower your monthly payment even more. With a lease, you will pay the monthly payment as well as sales tax in most states, and a financial rate called the money factor that is similar to an interest rate. The first payment is due at signing. Leases are done through Ford so they own your vehicle and you are borrowing it typically for up to 3 years. There are mileage restrictions with a lease, usually 36,000 miles. If you go above the allotted, mileage, you may have to pay a fee. The same is true for damage or tire wear. Once your lease has expired, you can choose to turn it back in or purchase it for the depreciated value. There may be a security deposit or other lease fees upon return. We know this is complex so we are here to answer your questions by phone, online, or in person.

Which Is Better For Me?

Now that you know the difference between a lease and a loan, you may wonder which one is right for you. If you like to own your vehicle and tend to hold on to them for long periods of time, financing may be a better option for you. It is also a great option if you drive many miles per year. Leasing may be a better option for those with excellent credit that do not drive many miles per year and can stay within a limited amount of miles. It is also a great option for people that are looking to lower their down payment. If you are still unsure which option is right for you, come talk to our financing experts at Len Stoler Ford and we will help you weigh your options and decide which one makes the most sense for your situation.