880 Walkers Line, Burlington, ON, L7N 2G2
My Garage

Is it cheaper to buy or lease a new car?

Is it cheaper to buy or lease a new car?

640 × 480
Here at Car Nation Canada, we continually strive to deliver amazing deals regardless of whether you’re buying or leasing. Either way we work our hardest to get you the car you want at a price you can afford. One question we are asked a lot is whether it is cheaper to buy or lease a new car. Let’s shed some light on that.

The short answer is that is depends entirely on your circumstances, what you’re going to use the car for, how much money you can put down and what kind of car you’re planning to buy. There are a few things to take into consideration.

Type of car
As a general idea, cars with good resale values make better purchases than leases. Even though resale figures factor into lease costs, it is more a factor for purchasing. If you buy the car, you own it once its paid for and have an asset you can use against your next car. If you lease it, you have nothing.

If the car doesn’t have such strong residuals, it might be better to lease. That way, you are not the one taking the loss. Resale is factored into lease costs but at the end of the day, depreciation is borne by the company and not you.

Down payment
Putting more money down in both situations can help lower the long term cost of buying a new car. A typical lease will include an up front cost of x times the monthly amount. This is usually 3 or 6 months in advance. If you can afford more, your monthly lease payments reduce.

The same is true for a car payment. The higher the down payment, the less you have to make up with finance. Here you can either reduce the term or the monthly cost depending on the deal in question.

Most lease deals limit mileage and this doesn’t work for everyone. As always, there is room for negotiation but it will increase your monthly cost. As will any excess mileage charges you might incur if you go over that limit. Different leasing companies offer different mileage limits so this is hard to quantify.

Buying means no mileage limits but a potentially lower resale value for a high mileage vehicle. If you drive a serious amount of miles, you will need to factor in a reduced resale value once you want to change up.

Another key influence over whether it may be cheaper to buy or lease is how well you tend to look after your vehicles. Lease vehicles will need to be returned in a similar condition to how it was supplied new. There are allowances for wear and tear and for age but the car must otherwise be kept stock and returned almost as new. There will be costs incurred for any repairs required at the end of a lease.

If you buy, it obviously pays to keep the car in good condition to improve resale but you have more freedom. You can customize the car, upgrade it or repair it as you see fit. These things may affect resale for better or worse depending on what you do.

There is no one answer to whether buying or leasing a car is cheaper. If you want to know for sure, visit your nearest Car Nation Canada dealership and we can walk you through your options.

Categories: News

Tags: , , ,