Difference between Leasing and Financing Roughly 200,000 cars are sold every month in Canada. Most of the customers who are buying these vehicles must make a big decision - whether to lease the vehicle or finance it. While both leasing and financing have some similarities, they are actually quite different methods of owning the vehicle.
We at Countryside Chrysler have got both the terms simplified for you.
When financing, the majority of the time you are in a five, six, or seven years' contract. However, at the end of the contract, you do own the vehicle.
Whereas in leasing, you have a vehicle for a shorter term, which is usually three or four years, with the option to buy it out or lease another vehicle at the end of the contract. This allows you to have an option to upgrade the vehicle sooner as your lifestyle can easily change in three or four years.
Lease payment is often low than the financing payment as it will be based upon the vehicle's estimated depreciation during the term. With the financing payment, you will be paying off the entire cost of the vehicle plus interest, taxes, and fees over the duration.
Leasing agreements do have a limit of the kilometer per year depending upon the term, whereas in financing you can drive as many kilometers as you want. Hope this video clears any of your doubts regarding the difference between both.
If you have any further queries and want to opt for the right option, we can assist you. Visit us today!