Lease vs Financing

Are you a first-time buyer or an experienced car buying veteran? Either way, it's important to know the difference between leasing or financing your next vehicle.

When you're choosing the right option for yourself, look at things like: your lifestyle, how much you plan on driving the vehicle and if you are already considering a possible upgrade over the next few years. Let's take a look at the differences between both options before you make your decision.

If you decide to lease your next vehicle, there are a lot of factors to consider. If you are a frequent driver and you often put a high number of kilometers, you could run the risk of going over your mileage limit. You could be responsible for the cost of those extra kilometers. These costs also apply if you return the car with over and above average wear and tear according to the dealership. Because the dealership wants it returned in selling condition, it also prevents the driver from making dramatic modifications and customizations to the vehicle.

Leasing also means that you don't own the vehicle and unless you decide to buy it, you would have to return it at the end of its lease. On a positive note, lease payments are almost always lower that loan payments because you're only paying for the vehicle's depreciation during the lease term, including interest charges, taxes and fees.

With leasing, you don't own the car and unless you decide to buy it, you would have to return the vehicle and the end of your lease period. You can return the vehicle, pay any end-of-lease costs and walk away and start all over again. When your lease is finished, you get to lease a new car without the worry about selling or trading in the old one. But while the future value won't affect you financially, you don't have any equity on the vehicle.

Consider these questions before you decide to lease:

  • Do you enjoy driving a new vehicle every 3-4 years?
  • Do you want LOWER payments on your next vehicle?
  • How many kilometers do you drive a year?
  • Is it considered an average amount?
  • Do you enjoy having the latest technological features on your vehicle?

When you decide to finance your next vehicle, once the payments end, the car will belong to you. This means that you can modify or customize the car to your choosing without having to worry about removing those modifications when you trade-in.

While loan payments are much higher than that of leasing, you can sell or trade your vehicle at any time and money from that sale can be used to pay off any outstanding loan balances. The vehicle's value will depreciate but the cash value of it is yours to use as you like. You've also built equity toward paying for your next vehicle.

If you're a frequent driver, you don't have to worry about mileage limits but be advised that higher mileage vehicles could lower your trade-in or resale value.

Consider these questions before you decide to finance:
  • Do you mind having HIGHER monthly payments?
  • Do you want to hold on to your vehicle for many years before you trade it in or resell?
  • Do you drive more than the average driver or the lease's allotted amount?
  • Do you have any possible lifestyle or job changes in the near future?
  • Do you mind the cost and possible inconvenience of expected repairs once the warranty expires?

The choice will ultimately come down to your personal preference and financial situation. Whether you choose to lease or finance your next vehicle, Airport Mazda is dedicated to provide you complete customer satisfaction. Come and see us today!

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