Finance vs. lease:
the pros & cons
Deciding whether to finance or lease a vehicle often depends on your individual needs, preferences, and goals. At Go Auto Kelowna our finance experts are here to help you find the best solution that aligns with your budget and lifestyle.
Pros of financing:
- Ownership: When you finance a car, it's yours. You can keep it as long as you want.
- Unlimited Mileage: There are no restrictions on how many kilometers you can drive each year.
- No More Payments: Once you've paid off the car loan, you're free of monthly payments and have equity in the vehicle.
- Customization: You're free to modify your car with accessories like a roof rack, cargo carrier, or running boards.
Cons of financing
- Depreciation: Cars tend to depreciate over time, which means their value decreases.
- Repair Costs: Once the warranty expires, any repairs needed are your responsibility to pay for.
- Selling or Trading: When you want a new car, you'll need to sell or trade in your old one, which can be a hassle.
Pros of leasing
- Lower Monthly Payments: Leasing a car can often result in lower monthly payments than financing.
- Regular Upgrades: You can drive a new car every two or three years, taking advantage of the latest features.
- No Hassle at the End: If you're planning to move or travel at the end of the lease, you won't have to worry about selling the car.
- No Depreciation Concerns: Since you don't own the car, you don't have to worry about its depreciation.
Cons of leasing
- Condition and Maintenance: You need to keep the car in good condition to avoid extra charges at the end of the lease.
- Mileage Restrictions: Leases often come with a limit on how many kilometers you can drive each year.
- Never-Ending Payments: If you always lease, you'll always have a car payment.
- Penalties: If you can't afford to keep the vehicle, breaking the lease can result in expensive penalties.
A few things influence your monthly lease payments, including:
- Lease charges
- The value of the vehicle
- Any down payment you make
- Interest rates
- Taxes and fees
- The anticipated depreciation of the vehicle