Finance vs. Lease at North Bay Toyota

North Bay Toyota
Finance vs. Lease at North Bay Toyota
How can we help you with financing your next car? It can be confusing, but doesn't have to be. Your auto finance choices are broader than ever, with various terms, great rates and leasing options.

When you buy, you pay for the entire vehicle cost, regardless of how many miles you drive or how long you keep it. Monthly payments are higher than for leasing. You typically make a down payment, pay sales taxes in cash or roll them into your loan, and pay an interest rate determined by your loan company based on your credit score. You make your first payment a month after you sign your contract. Later, you may decide to sell or trade the vehicle for its depreciated resale or trade value.

When you lease, you pay only a portion of a vehicle's cost, which is the part that you "use up" when driving it. Leasing is a form of financing and is not the same as renting. You cannot make a down payment, pay sales tax only on your monthly payments (in most provinces), and pay a financial rate, called the money factor, similar to the interest on a loan. You may also be required to pay fees and possibly a security deposit you don't pay when you buy. You make your first payment when you sign your contract for the month ahead. You may either return the vehicle at lease-end or purchase it for its depreciated resale value. You may be charged a lease-end disposition fee.

Lease vs. Buy Example 

For example, if you LEASE a $20,000 car that will have an estimated resale value of $13,000 after 24 months, you only pay for the $7,000 difference (this is called depreciation), plus finance charges, plus possible fees. You return the car at lease-end, or buy it to own it.

When you BUY, you pay the entire $20,000, plus finance charges, plus possible fees. You own the car at the end of your loan, although its value is less than the $20,000 you initially paid.

Contact North Bay Toyota today for additional information! 

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