Owning a car today is easier than ever, given the many flexible auto loan options. Financing the car and leasing it are the most popular options. If you need the car only for a short term, leasing is a better choice. But in many other situations, you might find financing to be a better choice. When you need a new car, is financing better than leasing? Let us look at some of these situations when financing is the better choice.

So, when is financing a better option than leasing a car?

When it Comes to Ownership
When you choose to finance a car, you can claim ownership of the car by repaying the loan. This is the main aspect that makes many choose financing over leasing. When you are the owner of the car, you have the freedom to use it the way you like. You can also spend as much as you like on customizing the car to suit your needs, both with exteriors and interiors.

Mile Limit While Leasing
One of the major limitations that people face when leasing a car is the mile limit. You need a high mileage lease in case you plan to use your car too often and for long trips. The miles per year allowed on an average lease restricts the use of a car. Such limits are not present when you are financing a car. If you are someone who uses your car very frequently for road trips, you should consider financing.

When it Comes to Payments
The regular monthly payment is one aspect where leasing a car might be an easier option to manage. With financing a car, you are left with larger monthly payments. Leasing only draws lesser payments. The actual difference depends on the term of the lease or the loan tenure you choose. However, leasing would be favorable only if you stick with short term car swaps. If you need to use the car for the long term, even with smaller monthly payments, you end up paying more over time.

Selling Is Not an Option When You Lease a Car
When you are financing the car, you can choose to sell it off when you do not want to continue anymore. Closing a lease ahead of the tenure would attract a penalty. Given that you are the owner of the car, buying it through financing options allows you the freedom to decide if you want to sell the car.

Better Credit Performance
Leasing doesn’t impact the credit score as much as financing. To actually benefit from timely payment of lease installments, it takes a longer duration. Auto loans, on the other hand, when paid on time, can help you in improving your credit score.

So, while choosing a car, is financing better or leasing? If you are looking to build a better credit or have the flexibility to customize your car, then financing is a better choice.