Should I Finance or Lease?
Should I finance or lease?
Choosing whether to finance or lease your vehicle is a big decision, and there are a variety of pros and cons with each. These depend mainly on your objective with the new vehicle, and your own situation.
- When financing a vehicle, you have a set of monthly or bi-weekly payments for the entire duration of your loan.
- During this period, you are building equity.
- When the loan is paid, you have complete ownership of the vehicle, and can drive it for a long time.
- If you do not plan to keep the vehicle long term, it can be a bigger undertaking financially, as you will need to make larger payments.
- Depending on how long you keep the vehicle, you could be paying out-of-pocket for repairs when the warranty period has ended, on top of making your finance payment.
- A leased vehicle has a shorter term with a smaller payment.
- It gives you flexibility and ease of ownership, as your vehicle can be covered under warranty for the full duration of your lease term.
- This is a great option, especially for those who prefer to drive a newer vehicle. The payments only reflect the depreciation of the vehicle during the shorter term of your lease.
- When leasing a vehicle, you have the option to purchase it at the end of the lease term. Until the point of purchase, you will have restrictions on the number of KMs driven.
- Any damage to the vehicle will need to be paid for out-of-pocket.
- If something changes in your financial situation during the term of the lease, you might not have the option to sell the vehicle to eliminate or change the payment.