Leasing vs. Financing

Leasing vs. Financing

Once you have found your perfect vehicle match, and organized a loan, the final big decision arises: leasing or financing.

Breathe easy knowing there is no "right" or "wrong" solution to payment, rather pros and cons for each unique buyer. A decision can be made by evaluating personal financial situations, preferences and driving habits.

Let's break down this decision by answering some questions most buyers have, and should ask themselves upon car shopping.

Firstly, what is the difference between leasing and financing?

Financing is paying the total purchase price of your vehicle over time, in consistent monthly payments. This makes it more manageable to afford the purchase of a car, with the end result being ownership of your vehicle.

Leasing is making consistent payments, (bi-weekly, monthly) to drive and keep the vehicle for a long term amount of time. Included in the lease payment is the cost to use the vehicle and the amount of depreciation occurred as the vehicle is in your possession. At the end of a lease term, you must return the vehicle to the dealer, or utilize the option to buy. You can do this by paying out the residual value, or "value remaining" on the vehicle you were leasing.


When should I lease?

What are the Advantages to leasing?

  • Driving a more expensive vehicle, with lower payments and little to no down payment.
  • The vehicle included factory warranty offers lower repair costs.
  • More flexibility with new vehicles every few years.
  • At the end of the lease, no trade-in troubles apply.
  • Less sales tax.

When should I finance?

What are the Advantages to financing?

  • The financing payments make the vehicle "yours" and therefore, the vehicle can be modified as you like.
  • Purchasing a vehicle saves money if compared long term to leasing (several years).
  • No excess mileage penalty allows kilometres and travel to be a non issue.
  • The freedom to sell the vehicle at any time.

Now that you fully understand the differences between the two options, In the end, choosing to finance or lease should be based off your driving needs, payment plans and personal preferences.