Leasing vs. Financing
Okotoks Honda is committed to getting you in the driver’s seat of your new car, and offers a variety of flexible lease and finance options to suit your needs. But these options can often appear complicated, which is why we have broken them down here to help you make an informed decision.
Simply put, financing a vehicle means that you are taking out a loan from a financial institution for the full cost of the vehicle, including all its associated fees and taxes. You pay back that loan over a set number of years via monthly installments, with the longer the term, the smaller the payments.
On the other hand, leasing offers you the chance to drive your favourite vehicle for only a portion of its cost. This is because you only pay for the amount of time that the vehicle is in your possession, which results in considerably lower monthly payments. The term is also usually shorter, ranging anywhere from 48 to 60 months. Here, calculation of monthly payments depends on the difference between a car’s original sale price and its residual value, which is a vehicle’s worth after the end of a lease.
- A great option if you can’t afford a larger down payment, allowing you to provide smaller monthly payments throughout your contract.
- Another benefit of leasing is that the vehicle is usually under warranty for most of, if not the entire duration of the lease, so any problems that occur will be minimized.
- Early upgrades are possible before your contract comes to its expiration; feel free to contact us to see if you qualify.
- Once the lease has ended, you have the option to lease a new vehicle or buy out your current vehicle. In accordance with the terms and conditions of your lease agreement, a vehicle inspection (examining any mechanical problems, dents, scratches or excessive wear and tear) will be required during the last two months of your lease.
- Once this has been completed, you will be eligible to start a fresh leasing contract with a new vehicle of your choice. If you decide to buy out your current vehicle, there is no need to worry about a vehicle inspection, excessive wear or mileage charges.
Although leasing is an option for some, if you want to be the complete owner of your vehicle, financing is the solution. The vehicle becomes part of your net worth, you can alter its appearance, add any customization and you don’t have to worry about the penalties of the lease-end process.
- Depending on your financial budget, you can determine how much your monthly payments will be.
- You also have the flexibility to pay off your loan faster by increasing your payment when you have the extra money to spend.
- Eventually, monthly car loan payments will stop, making your vehicle fully-owned which will free up your finances for other things.
- Once your finance contract has ended, you have the option to keep driving your vehicle for years to come, negotiate a trade-in and put a down payment towards your next Honda or you may sell your vehicle privately.
- Depending on the vehicle, financing can be more expensive on a monthly and long-term basis than leasing.
- Once the warranty has expired, the costs of repairs can begin to add up, but if you are able to commit to proper maintenance over a long period of time, this shouldn’t be problematic.
After finding your perfect vehicle and reviewing the pros and cons of both leasing and financing, choose the option that best fits your lifestyle and financial capabilities.
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