Thinking of Leasing Your Next Car?
You should. Think about it, that is. Leasing offers numerous benefits over purchasing a car, but only under the right conditions.
As a general rule of thumb, if you buy your car and plan on keeping it for 10 years, just finance it conventionally, rather than lease it. If however, you plan on buying 2 cars in that 10 year period, the math may not be quite as clear. If you find yourself on your third car in a 10 year period (IE: you buy a car today, trade it in 48 months for another one and then again in another 48 months purchase another car — meaning you’re onto your third car at 8 years…) you really should lease. Plain and simple.
That said, everyone’s circumstance is different and merits more in depth analysis. Our sales team and expert finance managers can help guide you through the decision making process to ensure that not only do you get the right car, you also drive away having structured your financing deal best suited to your needs.
We know by now you’ve seen this just about everywhere something is written about leasing, but nonetheless, here you go again (you know, to save you from having to to some other website for this info):
A) Less initial cash outlay
First, auto leasing requires very little or no cash outlay. Most leases have no down payment and the origination fee collected at the time you acquire your lease, called an acquisition fee, can often be included in the loan amount of the vehicle. Less cash outlay, means more money in your pocket for other things. All you have to do is make your first monthly lease payment at the time you drive away in your new car.
B) Lower monthly payment
As important as your overall cash savings at lease origination, is the savings you will enjoy throughout the life of your leased vehicle. Lease payments are typically 30 to 40% less on a lease than a loan. You could use these savings to add to your RRSP, tax free. Or you could put those extra funds towards your mortgage each month and even though your mortgage rate may be less than the lease interest rate, because of the long amortization period on the mortgage, pre-payments make a massive difference. As little as $200 a month prepaid towards a $500,000 mortgage amortized over 25 years at 3% annual interest would knock 33 months of interest payments off your mortgage — probably more than the value of the car you’re buying. Do something more with your money, instead of putting it into a depreciating asset. Lease your car and invest the difference.
C) A vehicle is an expense:
A vehicle is not an investment, it’s an expense. Consider this: would you buy a house that’s worth $800,000 today and is guaranteed to be worth $320,000 in four years? No! Then why buy a car today for $80,000 that will only be worth $32,000 in four years? A vehicle is one of the most rapidly depreciating assets in the market today. Consider leasing it instead and let someone else deal with the depreciation: buy assets that appreciate in value, but lease your vehicle because it depreciates in value.
D) More car for the money:
Because lease payments are lower than loan payments, you can afford to get more car for the money. This allows you to have a newer car more often, to upgrade when your needs change, and to just change it up on a whim.
E) Less sales tax:
On a vehicle purchase you pay sales tax on the entire purchase price of the vehicle. On a lease, you only pay sales tax on what you use of the vehicle’s value over the term.
These are just some examples of how leasing may be right for you. Talk to your friendly autoformer to learn more.
Our Lease Program:
So by now you’ve read a little bit about leasing on our site and think it might be right for you. Or maybe you’ve leased before, and had a great experience or a not so great experience. either way, you’ll want to know a little bit about how our leasing program works, so you can really make the decision that’s right for you.
A) All Fees Disclosed
All fees are fully disclosed before you sign your lease. This provides peace of mind with no hidden surprises.
B) No Down Payment Required
There is no down payment or security deposit required as part of our lease program, on approved credit.
C) Simple Interest Calculation
Simple Interest is the fairest lending calculation methodology which helps keep your payoff balance lower.
D) Lower Monthly Payment
A lease payment is typically 30-40% lower than a conventional loan payment.
E) Flexible Termination Options
Many auto lease programs are locked-in, inflexible, and impose large penalties, of thousands of dollars if the lease is paid off early. Because our lease is simple interest, there is no “front loaded” interest. Meaning in most instances you will have the ability to terminate the lease early, trade the vehicle for another lease or even make principal reductions to the lease.
F) Can Convert To A Conventional Loan At Any Time
You the freedom to convert the auto lease to a loan (subject to credit approval) or to purchase the car outright, at anytime during the lease.
G) Adjustable Mileage Limit
Annual kilometre allowances of 12,000 to 24,000 are available as well as custom mileage above or below these limits to fit your personal driving patterns.
H) No Cash Outlay for Taxes and Registration
Initial taxes and registration fees can be included in the cost of the automobile lease. There is no up front taxation of the vehicle purchase price for you to pay, or for you to finance.
I) More Options At Lease End than a Conventional Loan
At lease end you have many options available: purchase and keep or purchase and sell at any time, convert to a loan, find someone to assume the automobile lease, lease again, trade it back in to us, or turn in at the end of the lease term.
K) Lease-End Assistance
We are with you every step of the way. We’ll be sure to contact you prior to the expiration of your lease and we’ll work with you to decide which of your lease-end options is best and how to conclude your responsibilities based on what you chose to do at the time.