To finance or to lease; What's better?

To finance or to lease; What's better?

If you’re in the market for a new car, there’s an important decision to make – finance or lease? This is a question asked by thousands of soon-to-be car owners, but the truth is, it’s not that simple. It all comes down to preference and choosing what’s best for your case. Rest assured, you can count on us if you’re looking to lease or finance a car at Barrhaven. Our finance department will help you make the right decision for your case.


How Does Financing a Car Work?



Essentially, financing a car means taking out a loan through a financial institution – a bank, credit union, or even a dealership that you’ll be purchasing from. After the loan is approved, the financial institution will pay off the vehicle while you pay it in monthly installments with interest. Apply for a loan today through our effortless Quick Approval financing system and enjoy the vehicle of your dreams in no time.


The value of each installment will depend on the loan term, the amount, and the APR (annual percentage rate). The latter affects the final price the most and can vary across institutions, so choosing a good credit union or bank is crucial. 


As for the vehicle, it’s completely yours from the moment your loan is approved. Insurance can be taken care of by car owners or dealerships. The latter usually includes added benefits or special programs, such as WALK-AWAY insurance.


How Does Leasing Work?



Leasing works similarly to renting; you usually rent the vehicle for 36 to 60 months while paying a monthly installment. However, most leases include the option to purchase the car once the lease period ends. The value is generally predetermined in the lease contract and includes depreciation.


Leasing is usually cheaper than financing, but the main downside is that you don’t own the car. Still, some factors can affect your lease’s payments:


  • Sale price – This is the base value from which deductions are made.
  • Lease length – Payments can change according to the lease length; longer leases are usually cheaper.
  • Mileage – Some dealerships include a maximum annual mileage; your payments may increase if you go over it.
  • Residual value – This is the price to pay if you decide to acquire the vehicle at the end of the lease.
  • Fees and charges – These can include insurance and taxes.


Contact us if you’re looking to lease a car at Barrhaven; we offer a hassle-free leasing service with the best rates. We take care of everything, including insurance.


Why Finance Over Leasing?



Most experts consider financing a better decision than leasing, especially in the long term. Take a look below and see in which aspects financing can be better than leasing:


  • Termination – If you want to end your lease earlier, you’ll have to pay termination fees, which can be costly. With financing, you can sell your vehicle anytime and use the money to pay off your loan.
  • Damage – Vehicle damage and regular wear can affect your lease payments, but not in financing.
  • Mileage – Leases often have limited mileage, while financed cars have no restrictions.
  • Customization – Lease contracts don’t allow leasers to modify vehicles, resulting in hefty fines. If you finance a car, you own it, and therefore you can customize it as you please.

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