PART 2: SHOULD I FINANCE TO OWN OR LEASE……..WHAT IS BETTER ??
According to the Canadian Car Dealers Association about 60% of buyers lease their vehicles leaving the other 40% of buyers either financing or paying cash. This is a large ticket item for Canadians to purchase. Today we are providing a comparison of leasing vs financing – what is better?
In this scenario we are not putting any money down and although we could choose a longer financing term – we kept it the same as the lease so we could compare the numbers properly. The finance payment is high when compared to the lease payment, however at the end of the 4 years – you own the car baby! If you plan on keeping the vehicle for the max lifetime of 10 to 12 years – it works out to less than $6,000 per year. Check out how much you would pay to keep leasing (or should I say renting) a car for the next 12 years. You see which option you prefer! We will give you all the pros and cons next post!
LEASING: (like renting-you do not own the vehicle)
* Mileage package effects your lease payment: 12 KM, 16 KM or 20 KM per year. We chose 16 KM/year.
$65,400 Lease Amount, ($55,000 Vehicle + $2,095 Freight/PDI + Taxes and Licensing)
$997.79 per month, Four year lease at 4.98%
$47,893 TOTAL PAID OVER FOUR YRS, Options: Turn in Vehicle and pay closing fees, (approx.$1,500) or Buy-out Lease
*If you plan to do this again with another lease, the cost of leasing over 12 years = $143,679 or $11,974/year.
*If you wanted to purchase the vehicle at the end of the lease, you would pay more than the finance option.
$78,403 TOTAL COST WITH BUYOUT AT END OF LEASE, ($30,510)
$65,400 Finance Amount, ($55,000 + 2,095 Freight/PDI + Taxes and Licensing)
$1,478 per month, 4 year at 3.98%
$70,944 TOTAL PAID OVER 4 YEARS – YOU OWN VEHICLE
*If you plan to keep this vehicle for 10-12 years, the cost per year drops to $5,912/year to own your car.