There are a number of things to consider when you are deciding if you should lease or finance a car or truck. A Toyota lease gives you a number of advantages including lower monthly payments over financing for a comparable vehicle, while financing gives you the benefits of owning a vehicle for yourself. What is the difference between financing & leasing?
If you want to lease a car in Edmonton, St. Albert, Stony Plain, Spruce Grove, or Sherwood Park, then get pre-approved for a low percent car lease with Mayfield Toyota’s online car credit application.
ADVANTAGES TO LEASING A CAR
- A car lease will generally give you lower monthly payments and less up-front costs than financing the same model. Even low-percent financing may have higher payments than a comparable car lease.
- You can upgrade to the newest model every few years, often without having to pay significantly larger payments.
- When you lease a truck or car, you will typically pay less tax on a lease, as you only pay tax on the monthly payment as opposed to the full purchase price of a vehicle.
- A number of options are available at your lease end:
- 1. You can buy your vehicle for its purchase price
- 2. You can return your vehicle
- 3. You can lease or finance another Toyota vehicle
If you choose to purchase your vehicle at lease-end, there are a number of financing options available at Mayfield Toyota.
ADVANTAGES TO FINANCING
- When you finance a vehicle, you have the freedom of unlimited kilometers and all the other benefits associated with owning you vehicle, including the ability to equip it with your desired aftermarket accessories.
- You gain vehicle equity.
- There are no penalties for excess wear and tear and you are free to drive an unlimited number of kilometers each year.
- Financing has a lower carrying cost than leasing, as with a lease you are not repaying the entire value of the vehicle.
FINANCING VS. LEASING COMPARISON CHART
|Term||48 Months||48 Months|
|Lease End Value||$9,000.00||N/A|
|Taxes on Payment||$13.86||N/A|
Starting a Lease
Presumably you’ve already picked a new car that meets your needs. Here’s what you need to do next:
- Budget: Budgeting for leasing is about the same as for financing a car. While you don’t have to worry about a massive down payment, you still have to plan for what you can afford monthly. Our payment calculator can help.
- Determine Your Average Yearly Mileage: As you know, leasing a car comes with mileage restrictions. These can be negotiated higher or lower, but it will impact your monthly payments, and any overages come with penalties. That’s why it’s important to get a ballpark average of how much you drive currently.
- Get the Best Deal: Take a look at our new vehicle specials in order to save some money.
- Negotiate: Once you’ve picked a car, you will be negotiating for the price of the car first, which will then determine your lease payments. Even if you are leasing, you can still trade in a car to reduce your costs.
- Sign and Drive: You’ll want to make sure all the financial disclosures are clear to you like the penalties for excessive damage or going over your mileage restrictions. There will also be closing costs and taxes to cover. Once you’re all set, the car is yours!
What to Do During Your Lease
For the most part, having a car that you’re leasing is the same as financing a car. There are some exceptions, though, that you should be aware of:
- Mileage Restrictions: Your lease will come with mileage caps. If you go over these during your lease, you will have to pay a penalty.
- Maintenance: You will be responsible for the car’s upkeep and any damage that isn’t repaired by you will still come out of your wallet when you return the car.
- Alterations: Since you’re technically borrowing the car, you will not want to make any major alterations to the car unless you’re somehow able to easily undo them when the lease is over.
- Breaking Your Lease: In most cases, you can break your lease if you need to get out early. For example, say you lived in Massachusetts and are driving a Honda sedan, but you suddenly have to move to Montana, and a Honda SUV might now be better for you. If you do break your lease, you will likely have to pay a penalty fee that will be outlined in the initial terms and conditions. We recommend doing your best to not break the lease.
What to Do at the End of Your Lease
When you reach the end of your lease, you have a few options:
- Return Your Lease
- Exchange Your Lease for a New Leased Car
- Extend Your Lease on Your Current Vehicle
- Buy Your Leased Car
What you decide to do is entirely your decision! If you do decide to return or exchange the car, here’s what you need to do:
- Clean the Car: You’d be surprised how many people don’t bother to clean their vehicle or even remove their belongings before they return it to the dealership. You’ll want the car to be as close to its original condition as you can get it.
- Bring Any Paperwork: Have with you your initial terms of agreement, as well as any service records.
- Pay Any Fees: Depending on the car’s condition, you may have to take care of any excessive wear and tear or mileage overage fees at this time. At the very least, there will be a disposition fee you’ll have to pay. This fee covers the dealership’s cost while assessing the vehicle’s condition and determining its resale value.