Should I lease or buy a vehicle?
Leasing or buying a vehicle are both options that come with a different set of advantages and disadvantages, and making the right decision is entirely based on your personal needs and situation.
Ownership is the main difference between leasing and financing a vehicle. When you lease, your return your car to the dealership at the end of you contract, and your payments cover the depreciation of the vehicle's value. Leasing is similar to renting. You do not own the car, but have the option to purchase it at the end of your lease.
When you finance a vehicle, your payments go toward owning the car. When the loan is paid off, you have 100% equity in the vehicle. Loan payments are usually higher than leasing because you are covering the entire value of the car.
While monthly payments are usually less with leasing, lease contracts come with annual kilometre restrictions, early termination stipulations, and accumulative wear and tear charges that you should consider before deciding whether leasing or buying is better for you.
Benefits of Buying
- No restrictions on kilometres
- Because the vehicle belongs to you, maintenance is an investment
- You can modify the car as you please
- In the long run buying is more affordable
- Best choice if you want to keep the vehicle for a long time
Benefits of Leasing
- Monthly payments are more affordable
- Easily upgrade your vehicle every 2-4 years
- No depreciation
- More cost effective if you use your vehicle for work