Lease Or Buy a Car In Canada: Which Is Right For You?

The question of leasing or buying a car is as old as the cars themselves. A bit like Mac vs Microsoft, a question with no real answer and a question that can divide opinions.

Rather than get involved in any of that, our auto loans team will outline the pros and cons of leasing or buying a car. That way, you can decide for yourself which is the best option for your situation.

Pros of Leasing a Car

There are definite benefits to leasing a car.

• Lower Monthly Payments: Most leases cost less per month than an auto loan for the same car. As you’re mainly paying for depreciation plus a little profit for the leasing company, your payments are lower.

• New Car Access: Car leases are typically for 2-3 years. That means you get to drive a brand-new car every time the lease is renewed.

• No Maintenance Expenses: Most leases cover maintenance and servicing. Most new cars come with cover too so there’s nothing for you to do except drive the car to the dealership.

Cons of Leasing a Car

There are downsides to leasing though.

• No Ownership: You’re paying out every month but you don’t end up owning anything. A lease is rent and despite the expense, you end up owning nothing.

• Prices Are Increasing Some leasing companies have been increasing the costs of leases so there isn’t much difference between a lease and loan. Cheaper alternatives are out there but it is a worrying trend.

• Still Need a Down Payment: Even though you’re not buying anything, you’ll still need a down payment to cover the first couple of months of the lease.

Pros of Buying a Car

Buying a car has definite upsides.

• Ownership: You’re buying an asset that you’ll own at the end of the auto loan. That asset will be worth money and you can sell it to a dealership or trade it in against the next car.

• No Restrictions: Leases restrict the miles you can drive, what you can do with the car, where you can take it and the minimum condition it needs to be in order to return it. Buying a car has none of those.

• More Options: You can lease most makes and models of car but the company you deal with can be limited. Auto loans can be secured against any car bought from any dealer.

Cons of Buying a Car

There are downsides to buying a car too.

• Financing a Depreciating Asset: There is wisdom out there that says you should never finance a depreciating asset. While there is truth in that, not everyone has a choice.

• Down Payment: Buying a car has the same downside as leasing. The requirement for you to save for a down payment. You can get no money down auto loans but you’re much better off putting money down.

Whatever your choice, we can help. Whether you want to lease a new car from our range or have us secure you a great deal on an auto loan. We can prepare the finances and find you the perfect car for your needs.

If you're ready for a car loan in Southern Ontario, we'd love to help! simply fill in the form below to get started.