This is a question we get asked often. What should we do lease or finance? There really is no right or wrong answer, the answer that works best for your individual needs, time line and budget is what you should consider.
When you lease a vehicle you pay for the use of the vehicle for a set amount of time – typically 3 or 4 years, the longer the duration of the lease the cheaper your monthly payment. Cash down will also decrease your monthly lease payment. When you lease you are using the vehicle for a predetermined lease period and will own nothing at the end of your lease term. Leasing gives you the flexibility of changing in and out of vehicles easily and avoiding large service repair bills as you won’t own the vehicle for its life span. You can buy out your lease at the end of your term for your residual value but the attractiveness of leasing is the ease of walking away once your term is over and the affordability of the monthly payments. We encourage our guests to purchase Mazda’s Appearance Package which can save you from additional costs on wear and tear when you bring back the vehicle at the end of your lease.
What is a residual value? A residual value is a price that the manufacture has assumed the vehicle will be worth based on normal wear and tear, for resell value once it is returned. This price can’t change, it is locked in at the time of the lease, nor is it negotiable (as much as we want it to be!) This can be hugely beneficial at the end of your lease term, you have the ability to buy the vehicle at that point, and sometimes the vehicle is worth even more then the residual value, and makes for a great trade in! On the other side of that, the car’s value could have dropped significantly, and this way you can walk away with no responsibility to it.
Other Things to Consider?
- 1. Mazda’s warranty is 3 year new vehicle and a 5 year PowerTrain which means your vehicle is covered for the length of the lease. This takes away the cost and fear of unexpected and expense repair cost. Read more about Maple Mazda’s Unlimited warranty here.
- 2. You get all the latest tech and gadgets when getting a new vehicle every few years
- 3. If you move from province to province you do not need to pay the difference in taxes on the whole value, only your payments.
When you finance a vehicle you are paying for the entire cost of the vehicle, taxes on the vehicle and interest for the loan. The loan can range from 0%-5.99% APR for approved credit. We see the majority of financing terms anywhere from 5 to 8 years. At the end of the finance and once the loan is paid you will own the vehicle. Financing can be a good option for those who want to keep their vehicle for a longer duration. Typically financing monthly payments are more than lease payments but the attractiveness of financing is owning the vehicle at the end.