Vehicle Leasing FAQs
[toggle_content title=”Should I lease or buy my next car?”]
Will you save money leasing instead of buying? It depends on three things: (1) how good a deal you can strike with the dealership, (2) how many kilometers you put on a car, (3) how much wear and tear you put on a car, and (4) what the car will be used for.
To decide whether to lease or buy, compare the costs and other factors involved with both leasing and buying. Consider the following factors:
- Your initial costs
- Your ongoing costs
- Your final costs and option rights
- Whether you will be able to deduct any of the costs of the car because it will be used in a business
- Whether having an ownership interest in the car is of overriding importance
[toggle_content title=”Should I negotiate a car lease the same way as I purchase a car?”]
Similar to a loan, the monthly lease payment depends on the lease terms, the initial “purchase price” of the vehicle, and the interest rate. Unlike a loan, another important factor is the “lease-end” or “residual” value. This is the expected value of the car at the end of the lease term.
In a lease you are effectively paying for the difference between initial purchase price and residual value. You should negotiate the best possible (i.e. lowest) purchase price because this will lower your cost of leasing. If it is a closed-end lease and you do not intend to purchase the car at the end of the lease term, you should also try to negotiate a higher residual value.
[toggle_content title=”What are the differences between Leasing and Renting?”]
- Leasing vehicles will be purchased, according to your configuration
- Duration of contract is usually 36 to 48 months.
- Leasing contracts have to be fulfilled
- Payment of leasing rates are due in advance
- Vehicles will not be changed during the contract duration[/toggle_content]
[toggle_content title=”Which is Better, Leasing or Buying?”]The answer depends on a number of factors that are different for everyone. Your driving “personality”, your vehicle choices, and your financial objectives are important factors.[/toggle_content]
[toggle_content title=”What is the difference between a down payment and amount due at signing?”]This often causes misunderstandings. Lease inception amount (same as “due at signing” or “drive out” cost) includes all charges that require up-front payment in cash, such as taxes, official fees, deposits, first month’s payment, and down payment. Notice that “down payment” (cap cost reduction) is only part of the total “due at signing” amount. The down payment amount is the only part that reduces capitalized cost (amount financed), which reduces monthly payment amount.[/toggle_content]