What is the difference between a lease and a loan?

When you lease a car, you must return it within a pre-agreed time frame and mileage limit. At the end of your lease, you have the option to purchase the vehicle for a pre-determined amount or simply return the vehicle. However, when you finance a car with an auto loan, you will own it at the end of the loan agreement. There are pros and cons to each choice.  

For instance, your monthly payment may be lower if you choose to lease rather than purchase. Also take into consideration that the taxes associated with leasing versus buying a vehicle can vary. Our slider tool can help you compare the cost associated with both options.