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 »  Home  »  Automotive  »  Is Leasing For Me?
Is Leasing For Me?
By Automotive News & Tips | Published  05/29/2006 | Automotive | Rating:
Automotive News & Tips
Automotive news and informative automotive tips from industry experts. 

View all articles by Automotive News & Tips
The advantages of leasing are:
A lower monthly payment than you would pay on a loan for the same vehicle

Pay tax only on the monthly payment rather than up front on the full price of the vehicle

The opportunity to drive a new vehicle more often

The comfort of knowing your new vehicle is under warranty for the full duration in the case of the short term leases, (2 - 3 year leases averaging 20,000 km's / year)
 
You have options at lease end in most cases to:
1. Return the vehicle
2. Buy the vehicle if your lease has a purchase option
3. Let your New Car Dealer sell it

Avoid tying up your money in a vehicle.

The disadvantages of leasing are:
Carrying costs can be high if you keep your vehicle on lease for a long period of time

Costly if the lease is not based on the number of kilometers you realistically expect to drive

You don't own the vehicle and do not build up "equity" with a lease as you do when you purchase a vehicle

Leasing is not for everyone. The least expensive way to obtain a vehicle is always to pay cash. If you cannot pay cash then the shortest borrowing term available to you will result in the lowest interest cost or "carrying cost". The faster you repay what you have borrowed, the lower your carrying costs. Carrying costs for a lease are higher than with a loan of the same term because you are only paying off the depreciation, and not repaying the entire value of the vehicle.

"Is Leasing For Me?", Toronto Automobile Dealers Association - http://www.tada.ca/
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