In direct lending, you get a loan directly from a bank, finance company, or credit union. You agree to pay, over a period of time, the amount financed, plus a finance charge. Once you enter into a contract with a dealership to buy a vehicle, you use the loan from the direct lender to pay for the vehicle.

Leasing is really just a long-term rental contract with an option to purchase at the end. There is no ownership or equity in a leased vehicle unless you purchase the vehicle at a big discount. Since you don't own the leased vehicle, you have to return it (or buy it) at the end of the lease. With a conventional purchase, you own the vehicle and you

Though leasing might be a good option if you're tight on cash and have a poor credit history, it can be difficult to qualify. Most low-interest and ﾓno down payment" lease incentives are based on credit approval. Cars Direct states if you don't have a credit score above 720, those good deals might not be available.