Saturday, February 4, 2023
Uncategorized ADVICE: Advantages of financing your vehicle instead of leasing

ADVICE: Advantages of financing your vehicle instead of leasing

When buying a new vehicle, many consumers wonder if they should lease their new vehicle, or buy it by financing it. The second option will be the most expensive when you look at it from a monthly payment stand point, but like buying a house instead of renting an appartment, it has some undeniable advantages.

“Leasing a vehicle is a great option for many consumers, but in some cases it is more advantageous to finance. The final decision depends on our personal situation, and how we intend to use our vehicle”, says a sales representative at Bruce Hyundai.

Here are three advantages of financing the purchase of our new vehicle that we hope will help you with this complex decision.

No restriction on mileage

The biggest advantage of financing is that the vehicle we buy belongs to us. Thus, and unlike a lease, there is no restriction on the number of kilometers that we can travel annually.

In the case of a lease, we are usually limited to 24,000 kilometers per year (options do exist for 12,000, 16,000 and 20,000 kilometers annually). So if we travel a lot of kilometers per year, it will be more advantageous to opt for financing when buying our next vehicle.

More advantageous if we keep our vehicle longer

The majority of leases do not exceed 48 months, or four years. If we want to keep the vehicle longer, we must buy it at the end of our lease. Since it will sometimes be necessary to finance this purchase with the bank, our interest rate for the loan used to pay the residual value of the lease (the amount we have to pay to buy our vehicle) will be higher.

Conversely, when we buy a new vehicle, the interest rate is often lower for the duration of the loan. So if we compare the total amount paid for financing versus a lease with residual financing, it is usually much more advantageous to finance from the start.

Better return on investment

When you finance your vehicle, you pay for an asset that will belong to you one day. In the case of a lease, you pay for a vehicle that still belongs to the automaker. When you have completed the financing contract, you can resell the vehicle or keep it for a few more years without any payments. In both cases you can recover much of the difference between the amount you pay to finance and the amount you pay to lease with this scenario.

 

Trending Now

Mazda Promises the MX-5 Miata Will Outlive Us All

Today is a brighter day for us all. The MX-5 Miata was born in 1990 and will never die. For most, the Mazda MX-5,...

Hyundai will Invest $8.5 Billion into EVs, Including a Dedicated US Factory

$5.5 Billion of this investment will go toward a new factory in Georgia that will only build electric vehicles. The other $3 Billion...

State Farm won’t Insure 15 Hyundai and Kia Models due to High Theft Rates

Many of the automaker’s models made between 2015 and 2021 don’t have an engine immobilizer. A TikTok challenge is at the origin of...

Toyota Says the Grand Highlander will Have a Third Row fit for Adults

The Grand Highlander will be a stretched version of the mid-size SUV. Toyota will unveil this model at the Chicago Auto Show on...

Volkswagen Could Build its Next Battery Factory in Ontario

The automaker has already signed an agreement with the federal government. Other sites in North America are still being considered. This will be...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.