When you are in the market, searching for a new vehicle in Canada, you have two options available to you – financing and leasing. When you ask your friends and salespeople which one is better, you get different answers.
To put this debate to rest, here is everything you need to know about financing and leasing:
Financing – What is it?
Financing is a type of service offered by lenders and banks, where you get the opportunity to purchase a car. Rather than paying for the vehicle in a single payment, the vendor will break it down the amount into smaller ones. The tenure of the financing option determines how long you have to continue paying the loan.
Leasing – What is it?
The second option is leasing, where you get access to a vehicle for a given time. Every month, you have to pay a fee to the lender and return the automobile at the end of the tenure.
Which one is better?
One advantage that leasing has over financing is when it comes to monthly payments. With this type of credit, you can cut down on how much you spend. Also, it gives you the opportunity to pick up a new vehicle under the same option.
However, not everything is acceptable, when you go the leasing route. For starters, you will never be an owner of the vehicle. At the same time, lenders place restrictions on how much you can use the automobile, to cut down on depreciation. If you exceed these figures, they will charge extra, which nullifies the cheaper monthly payments.
Also, getting out of a lease contract is extremely difficult as a consumer. You will have to pay huge fines if you want to do so, which is a waste of money. At the same time, you can’t make any modifications to the vehicle, as it is a violation of your contract.
When you choose to finance your vehicle, instead of the lease option, you never have to face these problems. The best part is that you are the owner of the automobile. If you want to go the financing route, you can get in touch with TakeTheDrive, who will provide auto loans at incredible rates, irrespective of your credit score