BUY
This keeps you...
- From trading into a new vehicle sooner
- Driving the same vehicle longer even when you are ready to trade
Conventional loans have obligations when you trade
- The owner must find a buyer
- The owner assumes all of the risk for unexpected depreciation
- The vehicles condition, mileage, and wear and tear will be a factor in assessing the total value of the vehicle
- The owner must satisfy the loan balance regardless of the vehicle value
LEASE
This lets you...
- Consider vehicles with more options
- Choose your desired trade cycle
- Have peace of mind since most terms are within the warranty period
You have options at the end of your lease If the vehicle is worth more than the residual value
- Exercise your purchase option and keep it
- Exercise your purchase option and apply the equity to the next vehicle
If the vehicle is worth less than the residual value
- Drop off the keys and walk away (subject to any excess kilometres or wear-and-tear charges)
BENEFITS
1 . LOWER PAYMENTS AND PAY LESS TAX
Leasing gets you in and out quicker for less money down and a lower cost per month. You only have to pay tax on the value of the car you actually used during the life of your lease, saving roughly half the sales tax you would if you have bought the vehicle.
2. YOU'RE COVERED BY WARRANTY, MAJOR REPAIRS ON US
Most people don't want to be making car payments and repair payments at the same time. With a lease, your new car is under the factory warranty coverage so you don't have to worry about budgeting for repairs.
3. SHORTER TERMS MEANS YOU'RE DRIVING A NEW VEHICLE SOONER
The perfect lease is between 24 and 48 months, because it gets you out before issues are no longer covered by warranty and before the models change
4. DRIVE IN LUXURY FOR LESS
Did you know, according to LeaseGuide.com, 75% of all luxury vehicles are leased? Banks avoid financing vehicles above $30,000. If you want a luxury vehicle worth more than $30,000 but don't have the money to make up the difference, leasing is your best option. Leasing allows you to afford a nicer vehicle than possible with financing.
5. HAVE OPTIONS SOONER VS OBLIGATIONS LATER
At the end of the lease cycle. you simply turn the vehicle in. The dealer will take a report of its condition and as long as there is no damage, excessive wear and tear or mileage. it's out of your hands. A shorter lease term means more flexibility, you can also take advantage of it sooner. Longer finance terms often leave you in a deficit position until near the end of your term
MYTHS
1 . "IT'S NOT MY VEHICLE IF I LEASE"
The truth is, if you re making loan payments it's the banks vehicle until the last payment is made. If you often trade in your vehicle before it's paid off you should consider leasing as an alternative.
2. "I PUT TOO MANY KILOMETRES ON MY VEHICLE"
The truth is, every lease can be tailored to suit your specific needs so you can drive it as much as you want. Will it see rougher than normal use due to how or where it's used? We can adjust for that too.
3. IT'S A POOR FINANCIAL DECISION TO OWN
The truth is. a new vehicle starts depreciating as soon as your drive it off the lot. Leasing allows you to minimize your exposure to depreciation yet still offers you an opportunity to buy it at the end of the lease if it offers good value.
4. "ONLY BUSINESSES GET TAX BREAKS"
The truth is, leasing gets you in and out quicker for less money down and a lower cost per month. You only have to pay tax on the value of the car you actually used during the life of your lease, savings roughly half the sales tax you would if you have bought the vehicle.
5. "IT'LL COST ME A LOT WHEN I RETURN MY VEHICLE"
The truth is, if you take care of it as you should and return it with reasonable, or normal wear and tear, you will be fine. All the details are in the lease agreement so you know what to expect when you begin. Damage or excessive wear over and above what is acceptable is common sense so there shouldn't be any surprises.