Leasing or Financing your Vehicle
The Finance Choice: A Personal Decison Based on your Lifestyle
Jan 28, 2008
A breath of relief washes over you as you have finally decided on the new vehicle you will be driving. You’ve chosen the make, model and colour, and much to your delight the model’s in stock and on sale. The relief was premature as you are chauffeured into the business manager’s office and she asks do you want to lease or finance your vehicle?
Are you a leaser or a loaner
This is a personal decision and only you can determine which is best for you. To start off you need to consider what a vehicle means to you.
The Characteristics of a Leaser:
1) Do you get bored easily?
With a leased vehicle you can have a new vehicle anywhere from 12 to 60 months later. If this is you, stick toward the shorter terms.
2) Are you looking for a low payment?
Because you are only paying the monthly depreciation and a service charge, lease payment is substantially lower than a financed one. However, be wary of the trap of long terms (unless you want to drive a vehicle for 5 to 7 years).
3) Are you the first one to have the newest and greatest toy on the block?
Leases are perfect for you as you can upgrade your vehicle every 1 to 3 years, depending on long you decide to drive your car.
4) Is your life in transition: just finished school but thinking of starting a family in 2 to 3 years?
Do you love that Mini Cooper but know that in 3 years time you need a car to house a growing family? Well, a lease is for you. Drive the vehicle for that short term and when you trade it in you’ll be ready for that family vehicle.
The Characteristics of a Loaner:
1) Do you seek stability?
If you are an individual who likes the consistency and comfort of having the same vehicle, then a loan is for you.
2) Are you looking for a long term investment?
Although cars are depreciating products, the longer you own the vehicle, the more stable the product becomes.
3) Is your life fairly stable (sports cars are lovely, but not very baby friendly)?
4) Are you willing to invest more today for no payments in the future?
Once a vehicle is registered in Canada it can no longer be sold as a new vehicle. This means that that brand new car you’re driving is worth a lot less than a nonregistered one on the lot. One of the largest financial losses is choosing a car hastily and trying to quickly resell it, resulting in a potential loss of thousands of dollars.
By thinking things through and answering the questions listed above, you can eliminate this financial dilemma.
