BUY VS LEASE
Weighing Your Options?
The decision between buying or leasing a new or pre-owned vehicle in Etobicoke can be confusing for new customers. Buying a vehicle is as it sounds - paying for the entire cost of the vehicle, while leasing means that you only pay for the portion of the vehicle's cost that covers the time you'll be driving it.
To help you figure out which option works best for you, the team at Woodbine GM has provided a helpful guide. For any additional assistance, don't hesitate to reach out to our finance department or contact Woodbine GM online today!
Understanding Vehicle Financing
Financing a car means borrowing money to purchase a vehicle through a car or auto loan. This enables you to spread out the cost of a new car over several years, and interest on car loans is typically calculated using simple interest.
On average, a car loan lasts about 68 months, though 72-month loans are becoming more common. During this period, you are expected to make monthly loan payments, including both the principal amount and added interest.
Your monthly payments when financing a vehicle will typically be higher than lease payments, since they cover the entire cost of the vehicle plus interest. Once you've reached the end of the loan term, however, you'll own the car in full.
Understanding Vehicle Leasing
When you lease a vehicle, you are essentially renting it for a set period, usually between 2-4 years, during which time you're expected to make monthly payments. This gives you the flexibility to upgrade to a new model every few years without paying the full purchase price.
When considering a lease, there are a few terms to keep in mind:
- Lease term refers to the length of the lease agreement between you and the dealership.
- Down payments are the initial amount due upfront when starting a lease.
- Your security deposit is a refundable fee paid at the start of the lease.
- Your recurring monthly payment is determined by factors like price, duration, and mileage limits.
- The projected value of your vehicle at the end of the term is known as residual value.
Monthly Costs
Make sure that you're getting the best value out of your car by filling out our finance application. This handy tool lets you estimate your potential monthly payments and get a clearer picture of your budget.
Leasing is usually the more affordable option at first. While leasing will allow you to drive a new car every few years, it doesn't let you build equity on the vehicle.
In contrast, financing often includes higher monthly payments, but you're free to keep, modify, or sell the vehicle as you see fit once the loan is paid off.
End-Of-Term And Early Termination
A lot of our customers who finance their vehicles choose to buy them outright once the loan is paid off. If you're leasing, you've got several other options to choose from once your lease term ends.
Ending a lease early requires advanced notice, which might result in significant penalties. Failing to pay these penalties can lead to being sent to collections, which can have a negative impact on your credit score.
Visit Woodbine GM Today
Our team at Woodbine GM is here to help make the choice between financing or leasing a vehicle an easy one. Whether you’re a weekend adventurer looking for a reliably rugged ride, or just in the market for a solid daily commuter vehicle, we want to help you find the best option for your budget and lifestyle. For more information, don’t hesitate to contact us online or visit our location at 360 Rexdale Blvd. today!
