Lease or Finance?
The decision to finance or lease a vehicle is often a matter of personal preference. You know that if you finance your vehicle, you own it and can enjoy all the benefits of ownership, but what about leasing? In order to help you decide which is best for you, here are a few things that you should know about leasing.
Leasing advantages:
* Leasing typically provides for lower monthly payments and lower up-front costs than you would pay on a loan for the same vehicle
* When you lease, you only pay tax on the monthly payment. When you finance, you pay taxes on the full purchase price of the vehicle
* Leasing gives you choices at lease end:
1. You may purchase the vehicle at the Lease End Value indicated on your contract
2. You may return the vehicle as provided in your lease
3. You may lease or finance another Toyota vehicle
* Toyota Financial Services offers convenient financing and great rates should you choose to purchase the vehicle at the end of your lease.
Leasing disadvantages:
* You do not own the vehicle
* You do not build up equity in the vehicle
* Excess kilometre and wear and tear charges may apply
* Lower monthly lease payments may result in higher carrying charges than a loan
Here is an example that shows the difference in your monthly payment depending on whether you lease or finance your vehicle.
| Comparison Details | Lease | Loan |
|---|---|---|
| Term | 48 Months | 48 Months |
| Interest Rate | 7.95% | 6.95% |
| Selling Price | $ 18,000.00 | $ 18,000.00 |
| Taxes* | N/A | $ 2,340.00 |
| Selling Price | $ 18,000.00 | $ 20,340.00 |
| Lease End Value | $ 9,000.00 | N/A |
| Base Payment | $ 277.29 | N/A |
| Taxes on Payment* | $ 36.05 | N/A |
| Total Payment | $ 313.34 | $ 486.59 |
Here is an example that shows the difference in your monthly payment depending on whether you lease or finance your vehicle.
The MSRP and rates used above are approximate and used only as an example. Please see your representative at Scarborough Toyota for current finance and lease rates.
*Taxes (GST & PST) are 13% in this example.