FINANCE VS LEASE
Lease or finance your new vehicle
WEIGH YOUR OPTIONS
- Consider vehicles with more options
- Choose your desired trade cycle
- Have peace of mind since most terms are within the warranty period
- Exercise your purchase option and keep it
- Exercise your purchase option and apply the equity to the next vehicle
- Drop off the keys and walk away (subject to any excess kilometers or wear-and-tear charges)
- From trading into a new vehicle sooner
- Driving the same vehicle longer even when you are ready to trade
- The owner must find a buyer
- The owner assumes all of the risks for unexpected depreciation
- The vehicle's 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
NOW LET'S LOOK AT THE COST FOR EACH OPTIONS…
Lease payments are typically lower than finance payments for the same vehicle, at the same price point, with the same down payment regardless of financing or interest rates. This means leasing can be more cost effective by about 30% in the short term.
The comparative costs of leasing and financing are fairly even assuming the vehicle will be sold/traded in at the end of the finance/lease term. Some industry experts believe the lower fees associated with a vehicle loan puts finance over lease, however others argue that the short term savings go further making leasing the better option. In the medium term there is no significant cost advantage for either leasing or financing.
In the long term financing can have a significant cost advantage. The longer you own that same vehicle the more considerable that advantage becomes. The risk of unexpectedly higher than average maintenance costs or a total loss of a vehicle through an accident or damage however can mitigate that advantage. This shows that should you want a new vehicle every couple of years, or expect that your vehicle needs will change in the near future that a lease is likely to be the more cost-effective option. If you don't expect your needs or vehicle to change in the next 3-5 years the costs of either a leasing or financing are comparative and is up to your personal preference to decide which option best matches your life. If you plan to drive your vehicle for more than 5 years or until it can no longer be driven then financing becomes the more cost-effective option with the value increasing dependent on how long after your payments end that your vehicle is able to continue being safely driven before maintenance costs outweigh the benefits of acquiring a new vehicle.
KENORA CHEVROLET BUICK GMC IS HAPPY TO HELP!
We have assisted thousands of Western Ontario dealers find the new vehicle of their dreams, from Kenora and as far as Thunder Bay and we're confident that we can do the same for you. Lease the Chevrolet you want, finance your next GMC truck, whatever suits your needs! We're here to help everyone from the first-time buyer to our most loyal customers! In the meantime, if you have any questions, don't hesitate to ask or stop by our Kenora dealership today.