Car Leasing Vs Financing

Video Transcript:

When it comes to leasing, there are usually one or two leasing companies that will evaluate your creditworthiness. However, one of the advantages of financing is that you can drive as many kilometers as you like without being held accountable for how many kilometers are on the vehicle at the end of the term. You also won’t be charged for exceeding a certain number of kilometers, which offers more flexibility and ease.

Many people believe that if they finance a vehicle, they are stuck with it for eight years, but this couldn’t be further from the truth. You can finance a vehicle for eight years and trade it in after one or two years with no penalties. The only thing to consider is the market value of the vehicle versus what you owe at the time you want to trade it in. This could be affected by factors such as how much money you put down when you purchased it and the market conditions at the time you’re trying to trade it in.

Financing is not the only option that gives you flexibility when it comes to how long you want to keep your vehicle. Financing can also provide you with considerable advantages. While some vehicles don’t lease well, such as the Dodge Charger and the Dodge Challenger, others lease exceptionally well, and you should consider them if you’re thinking about leasing.

For example, the Jeep Wrangler currently has excellent resale value, which in lease terms is referred to as the residual value. This means you pay less during the term of the lease to keep the Wrangler for the duration you choose, whether it’s 24 months, 36 months, or 39 months. Generally, a strong residual value means that lease payments will be lower than finance payments, which is one of the main advantages of leasing. You could get a vehicle that would be considerably more expensive to finance for a more affordable payment through a lease.

It’s also important to note that leasing is not completely inflexible. Even if you lease a vehicle for 36 or 48 months, you do have the option to trade it in early. However, you will have a buyback option similar to a finance buyback, though it’s not as easy to trade in a leased vehicle early. So, keep that in mind. If you’re comfortable keeping the vehicle for the full term—whether it’s 36 months, 48 months, or whatever you decide—a lease can be a great option for you.

I’d love to discuss this further with you. Today, I just wanted to touch on some of the advantages and disadvantages of leasing and financing. As we discussed, some vehicles lease really well, which is an advantage, while others don’t lease well at all, making financing a better choice. I’m here to help you make that decision, so if you have any questions, please feel free to reach out to me or any member of my team at Ontario Chrysler.

Signing off for today, this is Menen, also known as The Wolf on Dixie. Thank you very much.