January 04 2023,
It’s time to buy a new vehicle, but you’re not sure what financial route you want to take. Thankfully, you have options: leasing or financing.
LEASE VS FINANCE
The main difference between leasing and financing is the matter of ownership. If you finance a vehicle, you’re paying it off with the intention of owning it at the end of the financing period. On the other hand, leasing a car or SUV is more like a long-term rental agreement, with the vehicle belonging to the dealership at the end of the lease. When choosing between the two options, you’ll have to consider several aspects of your situation, such as the vehicle’s purpose, how many kilometres you think you’ll drive, how much you afford each month, and more.
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LEASING
Leasing is a great option if you’re looking to have the vehicle for a shorter term and to pay lower monthly instalments. In the short term, leasing instalments are much lower than when financing a vehicle.
If you need a car for a short period, say one to three years, then leasing is a more affordable option. The same is true if you want to enjoy a luxury vehicle you couldn’t usually afford. However, the longer the lease continues, the more the costs balance out, with long-term leases costing about the same (or more) than financing the car would.
Like any rental agreement, leasing a vehicle also comes with a certain level of responsibility. It’s important to treat the vehicle as if it’s your own (e.g., keeping up with regular maintenance, ensuring it’s in good condition, etc.) to avoid wear-and-tear charges. You should also track your mileage to ensure that you don’t go over the number of kilometres agreed upon in your contract.
FINANCING
Financing is a great option for individuals who want to end up owning the vehicle. Although the monthly instalments are higher when you choose to finance, you get perks such as no mileage restrictions, not having to worry about extra wear-and-tear charges (other than the standard services your vehicle requires), and of course, complete ownership.
Other financing benefits include the ability to trade in the vehicle at any time without a cancellation fee and to customize it, ensuring it’s up to your exact specifications. However, since you are purchasing full ownership, you should also expect to pay a higher down payment, registration fees, taxes, etc.
THE BEST OPTION FOR YOU
At the end of the day, when looking at leasing vs financing, both offer many benefits. The route you choose will depend on your situation. When you’re making your choice, consider the reason you’re looking for a vehicle, what you’re using it for, your budget, and your end goal. If you can’t afford to finance a car now, you might consider leasing in the meantime. If you want to keep the vehicle long-term, financing may be the better route for you. The choice is yours, and your local automotive dealer is there to help answer any questions you may have about leasing vs financing, and work with you to decide which option is best for your budget, lifestyle, and needs.
