Lease or Finance a Car: Which Option Makes More Sense?

Lease or Finance a Car: Which Option Makes More Sense?

Posted on June 16, 2022

Sometimes it’s hard to know what all the terms mean when it comes to getting yourself into a car.  Take leasing and financing for example.  What’s the difference between them, and how do you know what’s right for you?  Let’s explore.

Leasing a vehicle can be an appealing concept because you’ll generally be under a warranty for any repairs, and you can trade in for a new vehicle every few years.  Sounds like a sweet deal, right?  It very well could be, but it depends on a few factors.

A lease often has lower payments than a financing plan, but it also means you never own the car your driving, the dealership does and you’re basically borrowing it from them long term.  These lower payments are also based on higher credit scores, so if you’re someone with bad or no credit, leasing is unlikely to be an option for you.

Leases also usually have a maximum number of kilometers you can travel within the timeframe of the contract.  If your commute to and from work is in town and you aren’t one for long road trips, then a lease is a great option.  They are also great for someone who always wants the latest technology in their vehicle.  A lease gives you the ability to trade up regularly.

When it comes to financing, you’ll have to consider your lifestyle and financial situation just as you would with a lease.  As mentioned above, if you happen to be someone with low or no credit, financing a vehicle is likely your only option.  While that means the short-term costs will be higher (your loan payments and interest will be higher than a lease), if you keep your car for the long term, it ends up being less expensive than trying to buy out a lease at the end of term.

If your goal is to get a car on the road and keep it there, financing is a good option, especially if you have a long commute or you love to drive up to the cottage for weekends in the summer.  There are no worries about how many KMs you put on the odometer.

When you decide to finance your next car, apply online and browse our inventory to find the perfect vehicle for your lifestyle and budget.

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