Buying a vehicle is the more straightforward transaction. Simply put, you’re paying for the cost and sales tax for the entire vehicle. If you finance the purchase with a loan, your monthly payments will be determined by the vehicle price, the interest rate on the loan, and the length of the loan. There may also be various finance charges and fees. When you make the last payment on the loan, you’ll own your car and can choose to sell it or continue driving it.
- Full ownership at the end of the loan
- No limit on kilometres
- Less worry about dents and dings/condition
- Flexibility to customize your vehicle
When you lease a vehicle, you’re only paying for the portion of the vehicle you use over the course of the lease, which usually lasts three to five years. Because you’re not making payments based on the entire value of the car, your monthly payments will be lower. There are very specific stipulations about the number of kilometres you can drive a leased car, the condition the car must be in when it’s returned, and penalties associated with ending a lease early, so it’s very important to read a lease agreement carefully. As with buying a car, there may also be various finance charges and fees associated with leasing a car.
- Smaller (or no) down payment
- A new car every few years
- You can drive a better car for less money
- No long-term commitment
There are Pros and Cons to Each Option
How attached you get to your vehicle?
What’s your allocated budget for it?
What you want your monthly payments to be?
How many kilometres you drive each year?
When you do the calculations, you’ll find that you can make some fairly broad generalizations about the cost of leasing versus buying:
- In the short term, the monthly costs of leasing are lower than the monthly costs of buying.
- In the long term, the cost of buying is less than leasing, because the buyer can continue to drive the car after all the payments have been made.
Now that you know some of the basics, we recommend that you look at your budget, learn more about the specifics of your credit rating and contact our sales team to find the vehicle and finance options to meet your needs. Our staff will work with you to find the solution to best meet your particular needs.
DON’T KNOW WHERE TO START?
Let one of our helpful sales advisors guide you through our process to have you drive away on your new vehicle, today!