Car Lease or Buy: Which is the Better Option?
If you’re thinking about getting a new car soon, be prepared to do a hefty amount of research and prep work.
Before going on their first test drive, new drivers usually need to spend countless hours familiarizing themselves with various models, pricing options and perks. However, once you’ve found the perfect ride, you’re plagued with a final decision: should you opt for a car lease or buy the model from a dealership?
If you’re still on the fence about whether you should lease or buy your next vehicle, be sure to continue reading.
START A QUOTEShould you lease or buy a car Canada?
At Surex, our team values transparency and honesty. So, we’ll be honest with you — there’s no black-and-white answer to the, “is it better to buy a car or lease?” debate.
Every driver in Canada has different needs and expectations. Assessing the pros and cons of leasing or buying can help you decide which option meets your needs.
Pros and cons of buying a car in Canada
Are you having a hard time deciding whether you should buy or lease a car Canada? If so, be sure to take a look at the following list of pros and cons:
Pros of buying a car in Canada
Some of the pros of purchasing a car include the following:
Practical
Simply put, not everyone needs to have a new vehicle every couple of years. Many Canadian drivers want a car that’s consistent and reliable. So, instead of switching out their rides every year or two, many Canadian drivers prefer to invest in a vehicle they know they can trust.
The car is yours
Some Canadian drivers find it particularly satisfying to own their vehicle. There’s something undeniable special about the moment when you make your final car payment and can say to yourself, “this car is mine”. Drivers who lease their vehicles never get to experience this unless they decide to purchase the model after the lease term expires.
Build credit score and history
If you have a long-term vehicle loan, you can use it as a tool to increase your credit score or build a credit history.
Drivers can improve their credit score by strategically putting their car payments on their credit cards and paying the debt in a timely manner.
In addition, some credit card companies have programs that allow you to qualify for a vehicle loan without having any credit history. Doing this will enable you to start on the right foot and help you build your credit history (which will be vital if you ever want to purchase a house).
Cons of buying a car in Canada
Here are some of the cons of buying a car in Canada:
Depreciation
You’ve likely heard the rumour that new vehicles lose 50% of their value as soon as you drive them off the lot. Thankfully, this is just a myth. Most vehicles don’t depreciate that quickly — but drivers should know that new cars do lose value relatively swiftly.
For example, you bought a car two years ago but have decided that you no longer enjoy it. Should you choose to sell it, you’ll be hard-pressed to get more than a small portion of your original investment back.
Maintenance expenses
As the vehicle owner, you are responsible for paying for any repairs or general maintenance that needs to be done. Covering these expenses can cost a pretty penny, especially if you own a luxury vehicle.
Pros and cons of leasing a car in Canada
Now that you’re up-to-speed on the pros and cons of buying a car let’s assess the positive and negative aspects of leasing.
Pros of leasing a car in Canada:
Here are some of the pros of leasing a car in Canada:
Affordable
Although leasing can get expensive if you’re not careful (more on that later), it is the more cost-effective option for drivers who want a vehicle for a short time.
Instead of covering the cost of the entire vehicle (along with interest), drivers that lease their cars essentially pay for temporary usage. With this in mind, you can see how leasing is a cost-effective option for certain drivers.
Added flexibility
Leasing a vehicle gives drivers a considerable amount of flexibility. If you buy a car from a dealership, you’re stuck with it until it breaks down or you decide to sell (which, as mentioned earlier, isn’t usually the most lucrative choice). In contrast, if you lease, you can try out different styles and models every couple of years.
Additionally, if you are in the middle of your term and decide that you don’t like the vehicle, you can try a car lease takeover. A car lease takeover is the transferring of a lease agreement between two drivers. If you find someone to take over your lease, they take on all the lease-related responsibilities that you previously had. In turn, you can start fresh and find a new set of wheels without having to break your original agreement.
Cons of leasing a car in Canada
Here are some of the cos of leasing a car in Canada:
Kilometre limits
Every lease agreement clearly states the maximum amount of kilometres that a driver may travel throughout the year — this is referred to as the kilometre limit.
Most dealerships offer various kilometre limit options, ranging from 15,000 km to 24,000 km per year. But, if you happen to exceed this limit, you’ll have to pay a fine. Drivers who like to go on road trips or scenic drives should keep this in mind.
Need to keep the car in good condition
Thankfully, car dealerships don’t expect you to return the vehicle in the exact same condition — but they won’t be too pleased if the car is scratched, scuffed or dented.
If the damage exceeds the level of wear and tear that is stated in the lease greement, you’ll have to cover the cost of repairs.
Get insurance for your leased or owned vehicle
Whether they decide to lease or buy a car, Canadian drivers need to have car insurance. Without the proper coverage, you may have to pay a small fortune to repair or replace your recently purchased or leased vehicle.
Are you having a hard time finding car insurance quotes? Don’t hesitate to get in contact with a Surex insurance advisor. Our advisors know the Canadian car insurance industry like the backs of their hands — so, when we say we provide affordable, quality quotes, you can expect Canada’s best.
