Should you lease or Finance my car: which option is best for you

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Should you lease or Finance my car: which option is best for you

Posted on July 17, 2023

Finding yourself on the fence about whether to lease or buy a car? You’re not alone in this dilemma. Both options have pros and cons, so weigh your personal needs to assess the situation properly. 

 

Leasing vs Purchasing

 

If you lease a vehicle, you aren’t the owner and must return it to the dealer after a stipulated time. The car’s value will depreciate over time, and your regular payments will cover these costs. In many cases, you can choose to purchase the vehicle at the end of the agreed term of leasing. A lease agreement is usually two to four years. 

 

A financial agreement is chosen if you need to borrow money when purchasing a car. You’ll sign a contract and pay a set amount for a predetermined period. Each payment you make will contribute towards complete car ownership by the agreed-upon contract's end. You’ll need to be approved for this type of financing before the contract can be processed. 

 

These payments are usually costlier than lease payments, and once you have completed the monthly payments, you’re the official owner of the vehicle. There is usually a trade-in option before the completion of the contract.

 

Leasing Pros

 

The leasing option usually ensures cheaper monthly instalments as the depreciation value isn’t a factor in the payment calculations. Your car can be traded in for a newer model every few years. 

 

Financing Pros

 

Selecting the finance option can be more cost-effective in the long term. There are no mileage restrictions, and any money spent on maintenance can be seen as an investment. The car and the monthly payment rates can be changed if desired.

 

Leasing Cons

 

You can incur penalties if you lease a vehicle. If you end a contract before the set date, you may be required to pay an early termination fee and the balance of the outstanding instalments. The leaser is also responsible for any damage to the car while under contract. 

 

Financing Cons

 

Since your financed vehicle is viewed as collateral, you’ll incur additional fees for any late payments. If enough payments are missed, you could face losing your vehicle. This will affect your credit score. 

 

Here at Laird Wheaton in Nanaimo, British Columbia, we pride ourselves on delivering excellent customer service time and again. Our financial consultants will be happy to guide you through every step of the process for car financing in Nanaimo. Come and see our GMC, Cadillac, Buick and Chevrolet brands - get in touch with us for vehicle financing or a car lease in Nanaimo today!