Welcome to Capilano Audi Dealership's finance vs. lease guide. We understand that choosing the right financing option can be a difficult decision for many car buyers, which is why we are here to help. In this guide, we will explain the key differences between financing and leasing a car, and help you make an informed decision based on your personal financial situation and driving needs.
Lease vs Finance
Finance!
When you finance a car, you are essentially taking out a loan to pay for the car's purchase price, plus interest and fees. You will make monthly payments to the lender over a set period of time, usually 3-5 years, until you have paid off the entire loan amount.
Advantages of Financing:
- Ownership: You will own the car outright once you have paid off the loan.
- No KM Restrictions: You can drive as much as you want without worrying about excess KM charges.
- Customization: You can modify the car to your liking since you own it.
- Long-term Savings: Over time, you will pay less money than if you were to lease multiple cars.
Disadvantages of Financing:
- Higher Monthly Payments: Monthly payments tend to be higher than leasing.
- Higher Down Payment: You may be required to put a larger down payment than leasing.
- Depreciation: The car will depreciate over time, causing its value to decrease.
Lease!
When you lease a car, you are essentially renting it for a set period of time, typically 2-3 years. You will make monthly payments to the dealership, which cover the car's depreciation and a financing fee.
Advantages of Leasing:
- Lower Monthly Payments: Monthly payments tend to be lower than financing.
- Lower Down Payment: You may be required to put a smaller down payment than financing.
- Warranty Coverage: You are typically covered by the manufacturer's warranty for the entire lease term.
- New Car Every Few Years: At the end of the lease, you can return the car and lease a new one.
Disadvantages of Leasing:
- Mileage Restrictions: You will be charged for any excess mileage driven over the set limit.
- No Ownership: You will not own the car once the lease term is over.
- No Modifications: You cannot modify the car since you do not own it.
- Long-term Costs: Over time, leasing multiple cars may cost more than financing one car.
Which Option is Right for You?
Choosing between financing and leasing ultimately comes down to your personal financial situation and driving needs. If you want to own the car outright, drive as much as you want, and plan on keeping the car for a long time, financing may be the better option for you. If you prefer lower monthly payments, want to drive a new car every few years, and do not plan on driving excessive miles, leasing may be the better option for you.
Contact the Finance Department Today!
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