LEASING & FINANCING

Oh my!! The question on most of our clients minds after vehicle choices are made, lets see if we can shed some light on this.

Lease or buy

The answer is – it depends. It’s not possible to simply say that one is always better than the other because the answer depends on the specifics of each individual situation.

Leases and purchase loans are simply two different methods of automobile financing (leasing is NOT renting). One finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks. When making a ‘lease or buy’ decision you must look not only at financial comparisons but also at your own personal priorities — what’s important to you?

When you buy, you pay for the entire cost of a vehicle, regardless of how many kms you drive it and pay an interest rate determined by your loan company. Later, you may decide to sell or trade the vehicle for its depreciated resale value. When you lease, you pay only a portion of a vehicle’s cost, which is the part that you use up during the time you’re driving it. Leasing is not the same as renting. You can have the option of unlimited kms, drive it for a set amount of years and at lease-end, you may either return the vehicle, or purchase it for its depreciated resale value.

Lease Payments are made up of two parts: a depreciation charge and a finance charge. The depreciation part of each monthly payment compensates the leasing company for the portion of the vehicle’s value that is lost during your lease. The finance part is interest on the money the lease company has tied up in the car while you’re driving it. In effect, you are borrowing the money that the lease company used to buy the car from the dealer. You repay part of that money in monthly payments, and repay the remainder when you either buy or return the vehicle at lease-end. Loan payments also have two parts: a principal charge and a finance charge, similar to lease payments. The principal pays off the full vehicle purchase price, while the financing charge is the interest on the loan.

LEASE – If you enjoy changing cars constantly, want lower monthly payments, don’t care about building ownership equity, have a stable predictable lifestyle, and drive an average number of kms, then you should lease. At the Mile’s End, we specialize in unlimited kms and maintain your cars.

BUY – If you don’t mind higher monthly payments, prefer to build up some trade-in or resale value (equity), like the idea of having ownership of your car, prefer paying off your loan and being payment-free for a while, don’t mind the unexpected cost of repairs after warranty has expired, drive more than average kms, prefer to drive your cars for years to spread out the cost, like to customize your cars, expect lifestyle changes in the near future, and don’t like the risk of possible lease-end charges — then you should buy. However, with all said and done, we can tailor any one of these methods to suit your needs. For Example, no lease end charges, shorter and longer terms, closed or open ended leases or financing that fits the budget.

We are your one stop to make sense of these and it will make sense when we know what your needs are.

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