Should you lease your vehicle or finance it?
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About one-third of Canadians purchased their vehicle outright in 2021, according to a report from Insurance Insight. The other two-thirds of car buyers financed or leased their vehicles.
Is it time for you to get a new vehicle?
About one-third of Canadians purchased their vehicle outright in 2021, according to a report from Insurance Insight. The other two-thirds of car buyers financed or leased their vehicles.
Both leasing and financing are programs that make owning a safe, modern vehicle more achievable. Leasing and financing have benefits and drawbacks, depending on your particular situation.
Below, I’ll discuss some of the pros and cons of both so you can make the most informed decision about your next car.
Financing a vehicle is a pretty straightforward process. Typically, you’ll make a down payment of around 10 to 20 per cent of the value of the car. Then, you’ll finance the remainder over two to six years.
While you’re paying off the auto loan, the lender holds a lien on the vehicle, allowing them to repossess it if you fail to make payments as agreed. Once the loan is paid off, full ownership of the vehicle is transferred to you.
When you lease a car, you’re essentially renting the vehicle and paying for its depreciation. Most lease terms range between one and three years, and typically only brand-new vehicles can be leased.
