When the time arrives for a new car in your possession, you have a few options. Paying the full sticker price for a car might sound appealing so that you don’t have to manage future payments, but for most people, it isn’t a realistic move. Instead, you can compare leasing and financing, and chances are that you’ll see the benefits of leasing.

Credit Score Requirements
If you have serious problems with your credit, you may need to work on repairing them before you can qualify for a lease or finance. However, keep in mind that opportunities do exist for people with poor credit scores. With a finance, you may not qualify at all when falling below a certain score. On the other hand, you may still have the opportunity to obtain a lease agreement on the car. Keep in mind that lower credit scores might mean higher interest rates.

Higher Payments
Regardless of credit scores and interest rates, your payments for a finance agreement are almost certainly going to be higher than the ones for a lease. Therefore, a lease allows you to keep more money in the bank each month. In the event that you are struggling with credit scores, you can use the difference between a finance and a lease to start more aggressively paying off those bills.

Amount of Time
Lease agreements usually last for shorter periods of time than finance agreements, which means you could procure a new car sooner if that is what you want. For example, most lease agreements last for 36 months whereas finance plans could go for up to 72 months or longer. When you aren’t sure where you see yourself in terms of cars in the somewhat distant future, a lease agreement is often the right option.

New Car
With a finance, you will probably want to keep the car for an extended period of time since you are putting more money into it over a longer period of time in most cases. However, that means you do not always have a new car. With a lease, you usually turn in the car every three years and start up a new lease agreement, meaning that you virtually always have a young car. Older cars can start to build up problems that cost you money.

Down Payment
Some people save up $10,000 or more before they enter into a finance agreement. After putting all of that money down, they may still have large payments to make on a monthly basis. In the event that you choose to lease a car, it is highly unlikely that you would need to save up that much money. In fact, you can sometimes enter into a lease agreement without any down payment at all.

Future Options
Financing a car means that you’ve made the final decision. If you no longer want the vehicle, you will need to sell it, or you can usually trade it in to cover at least part of the down payment on a new car. Opting for a lease means that you have time to evaluate if you want to keep the car for the long-term. At the end of your lease agreement, for example, you may decide that you want to buy the car at that point. Therefore, a lease provides you with more options.

The decision about whether to lease or buy is one you should make after carefully examining your situation and needs. Evaluating these factors can help you to decide.

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