Leasing or Financing: which is best for you?
Leasing or Financing with Parkway Hyundai : Which Is Best for You?
One of the biggest decisions when buying a car is determining whether to lease or finance it. Both options come with their pros and cons, and it can be hard to know which path is the right one for you. Check the details of leasing vs. financing a car and help you make an educated decision based on your needs.
Critical Differences Between Leasing and Financing
Ownership
The most significant difference between leasing and financing is that with financing, you own the car. Once you complete the payments, you have full ownership of the vehicle. On the other hand, when you lease, you are merely renting the car. When the lease ends, you can either turn the car back to the leasing company or buy it from the leasing company at a predetermined residual price.
Flexibility
Leasing provides you with more flexibility when it comes to changing cars. With a lease, you can get a new car every few years without worrying about selling the previous one. On the other hand, financing means owning the car, but it also comes with the challenge of reselling or trading it in when you want to move on to another vehicle.
Monthly Payments
Monthly payments differ between leasing and financing options. Lease payments are typically lower than finance payments because you're paying for the car's depreciation over the lease term instead of the entirety of the car value with financing. Financing payments can be high, but you'll eventually own the car. With both options, your credit history affects your payments.
Mileage Restrictions
Leasing agreements come with mileage restrictions because the leasing company owns the car and wants to keep its value intact. These limits are typically around 20 kilometres annually, and if you exceed the limit, you will be charged extra. On the other hand, with financing, the car is yours, and you can drive it as many kilometres as you want.
Vehicle Modifications
If you're looking to make modifications to your car, financing is your best option. Once the ownership is transferred to you, you can make as many customizations or changes as you like. Leasing, on the other hand, has restrictions; since you don't own it, you're limited to only manufacturer-approved modifications.
Resale and Trade-in Value
With financing, you're responsible for its resale or trade-in value, and you can get a good return with proper care and maintenance. On the other hand, with leasing, trade-in and residual values are established upfront and can be set in such a way that benefits the leasing company more than you.
Is it More Affordable to Lease or Finance a Car in Canada?
The overall costs of leasing versus financing depends on several factors such as monthly payments, interest rates, lease length, and down payment, among others. It’s crucial to understand all expenses and consider which approach is best for you and your financial situation.
When Should You Lease a Car?
Leasing is the best option for drivers who like to have access to a new car every few years with lower monthly payments. If you’re business-minded and need to run a company car, leasing would also benefit cash flow concerned business owners who can write it off from their business taxes.
Contact Us in Corner BrookÂ
When it comes to leasing vs. financing, picking the right choice boils down to your preferences, goals, and financial budget. Both options have advantages, and choosing which is ideal requires detailed research based on your unique situation. Contact Parkway Hyundai in Corner Brook for more details before making a decision.