Financing with Columbia Chrysler

What are your goals? We all have different priorities--in cars, life, and finances. When deciding on leasing vs. financing, what's right for one person can be totally wrong for another.

Generally, leasing offers lower monthly payments than financing, as well as the benefit of owning a new car every two or three years. However, financing offers its own set of advantages.

Luckily, we have a team of finance experts who are happy to help you find the best option for you. Call us at 604-273-8018 to book a free consultation.

Is Leasing Better For Me?

To drive a new car every two or three years
Lower monthly payments
The latest safety features
A car always under warranty

Being limited to kilometre limits
Having no ownership equity

A stable, predictable lifestyle
An average number of miles to drive
No problem properly maintaining your car

If this sounds like you, then leasing may be the best option for your needs

Is Financing Better For Me?

To build up trade-in or resale value (equity)
Complete ownership of your car
To be payment-free after paying off your loan
The freedom to customize your car
To drive your car for a long time

Unexpected repair costs after warranty
Higher monthly payments

To drive more-than-average miles
Possible lifestyle changes in the near future

If you prefer to own your vehicle outright, and plan to own for the long-term, then financing will be your best option

Short Term Cost

For the same car, same price, same term, and same down payment, monthly lease payments will always be 30%-60% lower than loan payments. This is still true even when compared to 0% or low-interest loans.

Medium Term Cost

The medium-term cost of leasing is about the same as the cost of financing, assuming the buyer sells or trades his or her vehicle at loan-end, and the leaser returns his or her vehicle at lease-end

Some comparisons sometimes show that financing can cost a little less than leasing due to fewer fees, lower total finance costs, and the assumption that a purchased vehicle will return full market value if it is sold or traded at the end of the loan. However, when the benefits of wisely investing monthly lease savings are considered, the net cost of leasing can be less than financing.

Long Term Cost

The long-term cost of leasing is always more than the cost of financing, assuming the buyer keeps his vehicle after loan-end. If a buyer keeps his car after the loan has been paid off, and drives it for many more years, the cost is spread over a longer term. That means the cost of buying one car and driving it for ten years is less expensive than leasing or buying four or five different cars over the same period.

If long-term financial cost savings were the most important objective in acquiring a new car, it would always be best to buy the car and drive it for as long as it survives, or until the cost of maintenance and repairs begins to exceed the cost of replacing it. However, many automotive consumers have other more immediate objectives that are more important than long-term cost savings.

Leasing vs Financing in Canada with Bad Credit

When it comes to leasing vs financing in Canada, a bad credit score makes things more difficult in both situations. With a bad credit score, your loan is more likely to be denied and your interest rate is going to be higher. But here's the bright side: Go Auto gives you a substantially higher chance of getting approved for a loan with bad credit. Thanks to our success, our in-house finance team can finance your loan--with our own money--even if the banks turn you down.

That being said, getting an auto loan with bad credit is a lot easier than taking out a personal loan with bad credit. If you don't pay back an auto loan, the lender can take the car you purchased as collateral, then sell it to help recover some (or all) of their cost, thereby avoiding a loss. However, with bad credit, your rate and monthly payments will be higher than someone with a better credit history.

The snag with leasing vs financing in Canada occurs on the leasing side, where a poor credit score is more likely to hurt you. The idea of using the car as collateral doesn't apply with a lease. With a lease, you never owned the car. The dealership has owned it the whole time. Once you've broken your lease agreement (by not paying on time), they're simply left with a broken lease and a vehicle that isn't worth nearly as much as it was when you started leasing.

This is why a good credit history is very important while leasing, and why leasing usually means lower monthly payments and smaller down payment requirements. It's kind of like a reward for your good previous behaviour.

In terms of leasing vs financing in Canada with bad credit, go with financing. It will be a bit more expensive, but it's the safer bet in both the long and short term.