LEASING VS BUYING LEASING VS BUYING
You’ve done hours upon hours of research, weighing the pros and cons, researching features and benefits, scrutinizing countless reviews, consulting friends and family members and alas! You’ve come to an informed, educated and, (perhaps) confident decision on the purchase of your next vehicle. Now, the final question: Should I buy or lease? Great question. There is no “right” answer. Each option has pros and cons. The decision comes down to lifestyle and personal preference. To make it easy, we weighed the pros and cons of each to help you decide which makes the most sense for your next purchase.
There is no right answer...the decision comes down to lifestyle and personal preference.
LEASING VS BUYING
Buying a Vehicle Buying Pros You Own It You can do as you please: whether that’s throwing a spoiler on the back, getting a new paint job, or accessorizing it to your heart’s content. No Mileage Restrictions You will not have to worry about being penalized for putting excessive miles on your vehicle. Go ahead, take that big cross-country road trip. Long-Term Savings Once the vehicle is paid off, you can scratch your car payment off of your monthly budget. Depending on how long you keep your vehicle, this could equate to huge savings. Total Freedom You can sell or trade your vehicle at any point. Even if you still have a balance on the loan, there will be no penalties or fees to pay, and you can use the cash from your vehicle as you please.
Buying Cons Lower Resale Value Your vehicle depreciates over time. This affects the amount you would receive should you trade it in or sell it. Higher Monthly Payments Your monthly payments may be higher because you’re financing the entire amount of the vehicle plus interest, taxes, and fees. Maintenance Costs Once the warranty expires, you are responsible for all maintenance costs on your vehicle. Higher Down Payment Often, you are required to pay as much as 20% down on your vehicle.
LEASING VS BUYING
Leasing a Vehicle Leasing Pros Finance Only A Portion You’re only paying for the difference between the vehicle’s current value and expected value at the end of the lease term - also known as residual value. Lower Monthly Payments Your monthly payments will often be less than if you were to buy the vehicle. This is because you are only paying to use the vehicle; the financial institution still owns it. Smaller Up-Front Costs You will usually only be required to pay the first month’s payment, a security deposit, an acquisition fee, and other fees and taxes. Sometimes down payments are not even required. Beneficial Tax Application Sales tax is only applied to the portion of the vehicle that is actually financed. Always Drive A New Vehicle At the end of your lease term, you can trade it in or simply walk away. This means you could get behind the wheel of a new vehicle every few years without worry of resale or trade-in value.
Leasing Cons Limited Mileage Most leases are limited to 16,000 - 36,000 kms per year. Every kilometer thereafter can cost up to $0.12, which adds up quickly. Wear And Tear The pressure is on to keep your vehicle in good condition. Any excess wear and tear on the vehicle results in depreciating its value will be due at the end of your lease term. Early Termination Fee If you decide that you want a new vehicle during your lease term or that your current vehicle no longer fits your driving needs, you will be subject to an early termination fee. Costly In The Long-Term Leasing could be more expensive in the long-term because you will always have a payment.
LEASING VS BUYING
The choice to buy or lease comes down to a number of subjective personal and lifestyle factors. Leasing gives you the ability to get into a brand new vehicle every few years without having to worry about resale or trade-in value when it’s time to get a new vehicle. Buying gives you the liberty to drive with repose and customize your vehicle as you see fit. There is no “right” or “wrong” answer, just a few more pros and cons to weigh before taking the final step into your brand new car!
Still don’t know whether to lease or buy? Maybe our quiz can help!
LEASING VS BUYING
Should You Actually Lease or Buy Your Next Vehicle? (1) How many kilometers would you say you drive annually? (A) 0 - 30,000 (B) 30,000 or more (2) Do you ever take your vehicle off-roading? (A) Absolutely not. (B) From time to time. (3) Do you keep up on general service for your vehicle? (A) I follow a strict service schedule. (B) Only as needed. (4) Do you like change? (A) Change can be a good thing. (B) Not really, I like to keep things consistent. (5) Would you rather rent or own? (A) Rent - There’s less to worry about. (B) Own - I like the freedom to do as I please. (6) You hear a rattling noise coming from your vehicle. You: (A) Get it checked right away. (B) Only get it checked if it starts to cause other issues. (7) You’re going on vacation, would you rather: (A) Take a plane. (B) Drive your car.
LEASING VS BUYING
(8) You purchase a new vehicle. How long will you keep it? (A) Probably only a few years. I like to keep things fresh. (B) Until the wheels fall off. (9) Do you use your vehicle for work? (A) No. (B) Yes. (10) When purchasing a vehicle, do you generally prefer new or used? (A) New all the way. (B) I always purchase used.
Picked Mostly “A”? Leasing is the choice for you! You’re looking for the newest model for a low monthly payment. Pick your vehicle and your payment and get ready to drive off in style.
Picked Mostly “B”? Buying is the choice for you! When you get a vehicle, you want to hold onto it and make it your own. The next step is to find a financing option and a vehicle that’s right for you.
LEASING VS BUYING