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.

Financing Pros:

  • 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.

Financing Cons:

  • 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.

Leasing Pros:

  • 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.

Leasing Cons:

  • 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.

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