You have just finally made up your decision about the vehicle that you are going to buy. Everything is ready to go, the price has been negotiated, and you are ready to drive off the dealership. The only thing really that is left is to decide between leasing and finance. So, what is the best option for you?
As with anything related to automotive, it is always a question of individual needs. Leasing will be the perfect solution for some buyers and a terrible option for others. The same can be said about financing so how should you go about making your final decision? The key is learning about the advantages and disadvantages of both solutions.
Benefits of financing
With financing, you own the vehicle which means that you can drive however many kilometres that you want every year, you can modify this vehicle as you see fit, and you can pretty much get rid of it whenever you like. If you’re someone that likes to keep their vehicle for seven, eight, or even 10 years or longer, financing allows you to purchase the vehicle over a specific term and then you can keep it without any monthly payments afterwards. Moreover, if you are someone that has to do a lot of driving, say over 20,000 km per year then financing may be right for you because you don’t have to worry about mileage restrictions with financing.
Benefits of leasing
When you lease a vehicle, you are only paying a certain percentage of that vehicle. Whatever is left to be paid is called the residual and that is optional at the end of the lease. If you don’t want to pay the residual, you simply hand the vehicle back at the end of the contract. With leasing, you generally enjoy a lower monthly payment. There are also fiscal advantages to leasing if you are purchasing a vehicle for your company or you use your vehicle for work. It is also the better option if you plan on keeping your vehicle for a short amount of time, say three or four years. Last but not least, when you lease a vehicle, you do not have to worry about depreciation. If your vehicle has depreciated, then you just hand it back and get a new one.
“Leasing is great when you like to change your car every three or four years, and it is also the most affordable option from a monthly payment standpoint,” says a sales representative at Vickar Ford.
The right option for you ultimately depends on what you want out of your vehicle and needs.