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LeasevsBuy-7BestDifferencesToLearnWithInfographics.pdf

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Difference Between Lease vs Buy

What would you do when you’re confused between a lease or buy. Leasing gives you the option of

immediately owning the asset without putting in too much money. Buying, on the other hand,

allows you to have ownership of the asset. Let’s understand the difference between Lease vs Buy.

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Lease vs Buy

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Leasing will allow you an option to immediately get hold of the asset you want to use without

paying a hefty amount. It’s like buying a phone. And for leasing, you would pay lesser money for

the asset per month than if you would have bought the asset. In leasing, you would receive

another bene�t. You would also be able to save taxes (depending on the place you’re located at ).

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Buying will allow you to own the asset. If you take a loan from the bank, a bank will own the asset

until the amount is paid off. But for buying an asset, you need to pay more per month than if you

would have leased the asset. Buying an asset also allows you to pay less insurance premium than

leasing an asset.

So, what would you do?

It depends on the need you have as of now.

If you feel that you need to use the asset for a limited period (i.e. 3 months to 6 months, or even a

year), you should go for leasing. Leasing will allow you to pay less, use the asset as long as you

would like, and then you can return the asset to the respective owner. Leasing will allow you not to

get involved in long-term loan payments and you will be able to save a lot of time and effort.

On the other hand, if you feel the asset has long-term value to you and you may use it for your

business for an inde�nite period of time, buying would be the ideal situation. You would be able to

own the asset immediately and whenever you will pay off the loan, it would be completely yours.

Lease

Buy

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Plus, you would also need to pay less insurance premium.

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Below is the Top 7 Comparisons between Lease vs Buy

Head to Head Comparisons Between Lease vs Buy ( Infographics)

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Both Lease vs Buy are popular choices in the market; let us discuss some of the major Differences

Between Lease vs Buy :

Leasing allows you to pay less and get all the bene�ts of buying (most of). Buying allows you

to take ownership but at a hefty cost.

Leasing doesn’t need any down payment (or need a lower down payment ). Buying needs

Key differences between Lease vs Buy

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10-20% of immediate down payment.

When you lease, you need to pay less amount per month as an amount for leasing the asset.

When you buy, you need to pay a handsome amount to the bank before you pay off the

entire amount of the loan.

Leasing is best when you need the asset for a limited time. Buying is best when you feel you

want to own an asset for long term.

The main differences between Lease vs Buy are as follows –

The Basis Of

comparison

Leasing Buying

Lease vs Buy Comparison table

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Meaning Leasing allows you to use the

asset immediately without

paying a hefty amount upfront.

Buying allows you to own the

asset not only for immediate

need but also for a long-term

purpose.

Amount per month Usually lower. Usually higher.

The matter of selling Once your lease is over, you

don’t need to worry about

selling the asset. You simply

return the asset to the dealer.

If you don’t like the asset after

the purchase, you need to �nd a

new buyer to sell off the asset.

Tax savings In leasing, you would be able

to save more taxes.

In buying, you would be able to

save fewer taxes (there can be

an exception).

Insurance premium You need to pay more

insurance premium in the case

of leasing.

You need to pay less insurance

premium in the case of leasing.

Down payment Downpayment in terms of

leasing is quite low. In

advertised leases, there’s

nothing due to getting the

lease (meaning no down

payment ).

You need to pay a down

payment of 10%-20% of the

asset immediately.

Long-term Loan There’s no question of a long-

term loan.

In a normal scenario, you need

to take a long-term loan from

the bank/�nancial institution.

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Lease vs Buy has both merits and demerits. The ideal way to approach this is to understand your

requirement �rst.

Not everyone will need to buy an asset immediately. As a business, if you’re just starting out, you

can take an asset on lease in the beginning since it would cost you less. Once you expand your

business and think that owning an asset will serve you more than the cost, you can go ahead and

buy the asset.

This has been a guide to the top differences between Lease vs Buy. Here we also discuss the

Lease vs Buy key differences with infographics and comparison table. You may also have a look at

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