Should You Lease or Finance Your Next Vehicle?

Blog Jun 6th, 2016

Lease or Finance

 

When it comes to buying a new car most of us don’t have the luxury of putting a large amount of cash down and walking away with a new car and no monthly payments. This means for most of us, our most likely options is a bank loan. So, when taking on this new financial responsibility, should you lease or finance your next vehicle?

 

Let’s take a look at how both work:

OWNERSHIP

Leasing: You are paying to use the vehicle for the term of the lease. After your lease is up you can choose to return the vehicle or buy it out.

Financing: You are paying to own the vehicle. Once you have finished paying off the vehicle you own it and can keep it or trade it in.

PAYMENTS

Leasing: You pay monthly based on the value of the vehicle for the term of the lease. This usually ends up being a lower amount compared to financing.

Financing: You pay monthly or Bi Weekly based on the entire cost of the vehicle. These payments are typically higher then leasing.

MILEAGE

Leasing: When you sign your lease you have different options available for KM allowance. Typically it starts at 18,000 KM a year.

Financing: You do not have KM restrictions but note that higher KM on a vehicle can affect the trade in or resale value.

WARRANTY

Leasing: The vehicle is covered under warranty for the term of your lease. Damage or wear in excess of what is noted in your warranty agreement will be your responsibility when the vehicle is returned at lease end.

Financing: The vehicle is typically covered under Basic Warranty for 3 years or 60,000 KM's* and a 5-year or 100,000-kilometre* fully transferable Powertrain Warranty. Excess wear or damage does not need to be fixed but this will factor into resale or trade in if not fixed. For more info about the Chrysler Basic and Powertrain Warranty - Click Here. 

CUSTOMIZATION

Leasing: Customization or options must be decided on with the dealership before the lease is signed. Anything after that is not permitted as the vehicle must be returned to the dealership as it originally left.

Financing: There are no restrictions on customization.

END OF TERM

Leasing: You can either return the vehicle to the dealership at the end of the lease or you have the option to purchase it.

Financing: You own the vehicle at the end of the term and can either keep it or trade it in or sell it for something new.

 

There are pros and cons to each option and you must make sure you are purchasing the right payment plan for your driving habits. We can do an assessment and ask the right questions to get you confident about your payments. We answer to the best of our ability and we will spend the time with you to make sure you are making the best decision!