When you take out a loan, all of the money used to pay it off applies to your eventual ownership of the vehicle. The initial down payment and principal on the loan cover the total cost of the purchase. Lease payments, however, apply only to the use of the vehicle. The total sum of payments covers the vehicle’s depreciation over the time you drive it and is usually less than the outright price of the vehicle. At the end of a lease you are given the option to buy out the vehicle, but if you do not buy out the vehicle, you do not own the vehicle.