Lease Vs Finance

Lease or Finance?


Leasing offers affordable payments with shorter terms. This lets you:

  • Consider vehicles with more options
  • Choose your desired trade cycle
  • Have peace of mind since most terms are within the warranty period

You have options at the end of you lease:

If the vehicle is worth more than the residual value -

  • Exercise your purchase option and keep it
  • Exercise your purchase option and apply the equity to the next vehicle

If the vehicle is worth less than the residual value -

  • Drop off the keys and walk away (subject to any excess kilometers or wear-and-tear charges)


Conventional loans typically require longer terms to achieve affordable payments.

This keeps you:

  • From trading into a new vehicle sooner
  • Driving the same vehicle longer even when you are ready to trade

Conventional loans have obligations when you trade:

  • The owner must find a buyer
  • The owner assumes all of the risk for unexpected depreciation
  • The vehicle’s condition, mileage, and wear and tear will be a factor in assessing the total value of the vehicle
  • The owner must satisfy the loan balance regardless of the vehicle value

Many customers think that choosing to lease is all about a lower monthly payment. Although that is true in some cases, even when the monthly payment is a little higher than financing, there are many benefits to leasing.

Lease or Finance?

After 48 months, the lease customer can choose to:

  • Return the vehicle with no negative equity
  • Exercise the option to purchase the vehicle
  • Lease a brand new vehicle with the up-to-­date technology and safety features, and receive total loss protection
  • Save on sales tax for only paying on the portion of the vehicle used
  • Eliminate potential accident damage depreciation during the term of the lease
Lease or Finance?

However, during the final 36 months of their contract, the finance customer may:

  • Deal with potential negative equity. In Canada, the average amount is about
  • Have to pay more in maintenance costs and deal with the vehicle being past its warranty period
  • Realize they should have been leasing in the first place if they are returning to the dealership within 36-48 months looking to trade in
  • Be exposed to accident damage depreciation

View Disclaimer