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Leasing

Lease arrangements usually involve a 15,000 miles-per-year cap and charge for extra miles. Since you drive very little, you may be a candidate for a luxury lease.

When you decided on a 24 or 36-month lease, you can be sure you'll always be driving a new vehicle.

Although you need to maintain and repair your leased vehicle just as you would an owned vehicle, because you typically lease for 2 to 3 years, the car is normally under warranty.

Many people prefer to drive a vehicle that is priced above their means and leasing provides that solution.

If you don't mind not owning the car, you are free to enjoy the benefits of leasing like low, monthly payments and a low down payment.

If you own the company, and you use your car for business, check with your tax advisor. You may be able to expense your monthly lease payment. And if the company you work for gives you a monthly car allowance, you may want to lease since you'll be able to drive a nicer car for a lower monthly payment.

	Lease	Loan
Terms	Lease terms are usually between 2 to 4 years.	Loan contracts are usually signed for 4 to 6 years.
Type of vehicle	The shorter term and lower monthly payment of a lease agreement allow you to drive a new and more expensive vehicle every 2 to 4 years.	The higher monthly payments usually make driving a new or expensive vehicle every 2 to 4 years unpractical.
Ownership	You don't own the vehicle. Unless you decide to purchase it, you must return it at the end of the lease.	You own the vehicle.
Up-front costs	Up-front costs usually include first month's payment, a security deposit, a down payment, taxes, registration fees among others. However, if you take into consideration the total cost of the vehicle and the monthly payment that you want, the sum is usually less than the up-front costs of purchasing.	Up-front costs usually include down payment, taxes, registration fees, and other minor charges. This amount is usually larger when compared to lease, especially if you want an expensive vehicle with low to moderate monthly payment.
Monthly Payments	Monthly payments are calculated based on the vehicle's depreciation during the lease term, rent charges, taxes, and other fees. They are usually lower than monthly loan payments.	Monthly loan payments are based on the total amount of purchase price, plus interest charges, taxes and other fees. They are usually higher than monthly lease payments.
Insurance	The insurance premium is usually higher.	The insurance premium is usually lower.
Early termination	You are responsible for any early termination charges stipulated on the lease contract. Make sure that you understand them.	You are responsible for paying off the loan.
Vehicle return	You need to return the vehicle at the end of the lease terms. There might be some end-of-lease charges.	You keep the car. What you do with the vehicle then is entirely up to you.
Future value	The lessor bears the risk of the future market value of the vehicle.	If you decide to sell or trade in the vehicle at the end of the loan terms, the risk of its future value is yours.
Maintenance	You are responsible for the maintenance of the vehicle during the lease term.	You are responsible for the maintenance of the vehicle.
Mileage	Most leases impose a limit on the number of miles you may drive. You can negotiate a higher limit with the lessor. However, bear in mind that it might increase the lease amount, and consequently the monthly payment. There will most likely be extra charges if the actual mileages exceed the limit set on the contract when you return the vehicle.	No limit. The vehicle is yours. Drive it as you please. However, the higher the mileage, the lower the resale or trade-in value of your vehicle.
Excess wear	Like mileage, most leases limit the wear of the vehicle during the lease term. You might need to pay extra charges when you return the vehicle, if the lessor determines that the wear is over the limit set by the contract.	Like mileage, there is no limit on the wear of the vehicle. Again, the higher the wear, the lower the resale or trade-in value of your vehicle.
End of term	At the end of lease, you can decide either to: simply return the vehicle, return the vehicle and lease another one. One may also purchase it for whatever the residual value of the vehicle is. If you decide to lease another one, you need to negotiate a new contract; whereas, if you decide to purchase it, you may apply for a loan.	At the end of the loan term, the vehicle is yours to keep.

Retail financing

When you lease a car, you are typically capped at 15,000 miles a year. Additional mileage can cost you up to 35 cents per mile. And that can really add up.

If you like to personalize a car, this investment can be lost on a leased car.

If you like the idea of ownership, you are less likely to be happy with the lease option.

You like the feeling of accomplishment that paying off a large purchase brings and should consider that when you lease a car, the payment ends only when you return the car.

If the car you presently own is over 3 years old you are more likely a buyer. While not always true, you can usually drive for less if you're willing to buy and drive for at least 3 years.

If you don't mind doing your own car repairs, you probably don't mind driving a car after the warranty expires.