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Is it better to lease or buy a car? What you need to know.

The time has come for you to lease or buy car. For drivers that prefer to buy new cars, you have two options – lease or buy (finance).

Making the decision on whether to lease or finance a car is a personal one and very much dependent on your circumstances and lifestyle.

At the most basic level, if you’re the type of person who drives a car into the ground until there’s nearly nothing left to drive, buying outright or financing a new vehicle is the better choice, and you can stop reading right now.

However, for most of us, there are many other factors we need to consider.

Freedom and flexibility

If you choose to buy or finance your car, you have the option of selling or trading in your vehicle at any time. Or you can opt to keep it as long as you like.

However, with a lease, there is a defined term of your agreement, and you can’t return the car early without financial consequences.


There’s the obvious – when you buy a car, you own it. When you’re done with it, you can sell the vehicle and keep the proceeds.

When you own, you also have the ability to customize your vehicle at an auto body shop.

With a lease, you’re essentially renting a car. says, “When you lease a car, you borrow the car’s entire value, less any down payment or trade-in value specified in your lease arrangement, just as you would if you were financing a purchase.”

You will pay interest, but you only pay the depreciation rather than the vehicle’s full cost.

Some lease agreements will give you the option to purchase the vehicle, but your lease payments haven’t built you any equity in the car.

Monthly payments

The primary draw for lease agreements is the lower monthly payments. The payments are lower because you are only paying for the depreciation plus interest charges, rather than the full value of the car.

On the other hand, when you choose to finance a car, a dealer may require a 10% to 20% down payment.

Whether you buy or lease, experts suggest that you get a better deal if you negotiate the price of the vehicle with your car dealer as if you plan to purchase the vehicle – only then should you reveal that you have a trade-in or plan to lease.

Of course, some down payment is always a good strategy as it will reduce the principal and consequentially, the interest.

Distance Driven

The number of kilometres you drive is a huge consideration when you’re trying to decide whether to buy or finance a car. A lease includes caps, usually around 24,000km per year.

If you live close to work, work from home, or if you don’t do a lot of discretionary driving, you may not put that many kilometres on your car. If that’s the case, a lease may be a viable option for you.

However, if you drive a fair distance for work or you like to take road trips across the country, it wouldn’t be the best option to lease a vehicle as you will have to pay at the end of your term if you go over the cap.

Hassle and worry

Leasing a vehicle can provide a comfort in knowing that you are getting a brand new car every 2-4 years, which will minimize your maintenance and repair costs.

When the lease is up, you simply turn in the car – you don’t have to worry about how to dispose of it! There’s the bonus that if the resale value is less than expected that it’s the dealer’s problem – not yours!

If you drive roughly 2,000km or less a month, enjoy the comfort of always driving a new car and place little importance on building equity from your vehicle, leasing is a fantastic option for you.

But, if you plan to keep the vehicle until the wheels fall off, you want to customize your car or drive it all across Canada, buying is probably the choice for you!

Ultimately, your lifestyle is the best indicator on whether you should buy or lease your next vehicle.

Had a fender bender in your new ride? Be sure to give us a call to fix your ride.