What is the primary difference between leasing and purchasing a vehicle?

The primary distinction between leasing and purchasing a vehicle is that leasing offers temporary use of the vehicle at typically lower monthly payments. When you lease a vehicle, you are effectively renting it for a set period, which often results in lower upfront costs and monthly payments compared to purchasing. This arrangement allows individuals to drive a new vehicle every few years without the long-term financial commitment associated with ownership.

Leasing often means you are also responsible for fewer maintenance costs, as most lease agreements cover the warranty period, reducing the risk of unexpected expenses. This is particularly appealing for those who prefer a new car experience without the responsibilities of ownership. In contrast, purchasing requires a larger financial commitment upfront due to the total cost of the vehicle and often involves higher monthly payments, but it provides ownership, allowing for equity build-up over time.