If you lease a vehicle, you don’t pay for the car’s full value – instead, you pay the difference between the vehicle’s current price and the value it is expected to have at the end of the lease. This amount is divided equally into monthly installments. Essentially, you are renting the vehicle for a couple years.
With this in mind, your initial down payment and your monthly payments will be smaller than they would be if you purchased a Toyota. Along with this, you will also always be covered by a warranty, because your vehicle will never be over three years old while you’re driving it.
There are some drawbacks to leasing. You will only have the vehicle for 2-3 years, depending on the loan term. During this time, you will have to stay below a certain mileage each month before your vehicle is returned. So, if you want a RAV4 crossover or a Highlander SUV to take on long road trips throughout Alberta, leasing would not be the best option for you. You also can’t change how your vehicle looks in any way, which means no bumper stickers or aftermarket parts allowed.
Purchasing a vehicle means that you will eventually own the car when you finish paying off the loan balance. This can save you hundreds of dollars each month after you pay off the remaining principal – an ideal perk for families who plan to drive their car, truck, or SUV for many years.
When you purchase a vehicle, you’re allowed to do what you want with it (as long as it doesn’t void the warranty). So, if you get a Tundra pickup truck, you can outfit it with all the off-road accessories you want.
When you purchase a vehicle, though, you will spend more upfront. You will likely require a higher down payment than a lease would – and you will have higher monthly payments. You also will eventually reach a point beyond the bumper-to-bumper warranty’s conclusion, which doesn’t happen when you have a lease.