Should You Lease or Finance Your Next Kia?

Leasing and financing solve different problems. Leasing usually means a lower monthly payment, mileage limits and a return at the end. Financing means higher payments, no mileage cap and ownership when the loan is paid. Which is better depends entirely on how you actually drive.

The choice between leasing and financing gets framed as a financial puzzle when it is mostly a lifestyle question. Here is how to figure out which side you land on.

What each one actually is

Financing is a loan. You borrow the purchase price, pay it back with interest, and own the vehicle at the end. Equity builds as the balance falls.

Leasing is paying for the depreciation you use. You cover the difference between what the vehicle is worth now and what it is projected to be worth at the end of your term, plus a finance charge. At the end you return it or buy it at a price set in the original contract.

Our leasing versus financing guide walks through the comparison in more depth.

The numbers behind a lease payment

Four figures set your lease payment:

• Capitalized cost — the negotiated price. This is negotiable on a lease, which surprises many people.
• Residual value — projected worth at lease end. Kia models with strong resale hold higher residuals, which lowers payments.
• Money factor — the lease equivalent of an interest rate. Multiply by 2,400 for a rough APR figure.
• Term and mileage — typically 24 to 39 months with an annual mileage allowance.

When leasing makes sense

Leasing fits if your annual mileage is predictable and moderate, you prefer being in a newer vehicle every few years, and you would rather stay inside the factory warranty than handle repairs on an older vehicle.

It fits less well if you drive a lot of miles, plan to keep the vehicle long-term, or want to modify it.

When financing makes sense

Financing fits if you keep vehicles well past the loan term, drive high mileage, or want an asset at the end rather than a return appointment. The Kia warranty is long enough that owning through most of it is a genuine advantage.

If your credit is a concern

Lease programs generally carry tighter credit requirements than financing does. If your credit history has some rough spots, financing is often the more accessible path.

We have several routes for this: our Fresh Start program, challenged credit financing, and alternative financing packages. A pre-owned Kia or something from our under $22K selection can also open doors that a new vehicle does not.

Current offers

Manufacturer programs change monthly and vary by model, term and credit tier. Check our new vehicle specials and pre-owned specials for what is live right now, and start the process on our finance page.

Frequently asked questions

Can I negotiate the price on a lease?

Yes. The capitalized cost is negotiable, and reducing it reduces your monthly payment.

What happens if I exceed my mileage allowance?

You pay a per-mile charge specified in your contract. If you know you will go over, buying miles up front is usually cheaper than paying at the end.

Can I buy my Kia at the end of the lease?

Generally yes, at the purchase option price set when you signed.

Does leasing require a down payment?

Not always, though money down lowers the payment. Be aware that a large down payment on a lease is at risk if the vehicle is totaled early.

Which is cheaper overall?

Over a single term, leasing usually costs less monthly. Over ten years, buying and keeping a vehicle typically costs less in total. It depends on your horizon.

Come talk it through at Greenway Kia Riverchase.