When to buy out a lease
Leasing-to-buy usually ends up being more expensive than a loan.
Should you buy or lease your new car in Canada?
Looking for a new car? What you should know about leasing versus owning.
Q: “I recently leased a Honda Fit and plan to buy it at the end of the five-year term. Is this a good strategy?”
—Linda van Vulpen, Halifax
A: Leasing-to-buy usually ends up being more expensive than a loan. Here’s why: interest charges are higher on a lease because you pay it off more slowly. The buyout at the end of the lease accrues interest with no decline over the entire term. Leasing contracts may also include up-front and buyout fees worth hundreds of dollars. Finally, many people who lease often don’t have money available for the buyout, so they end up financing through the dealer at market interest rates.
George Iny is the president of the Automobile Protection Association. Send him your automotive questions at [email protected]
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
Related Articles
What is the Canada Carbon Rebate? Plus, dates and amounts for 2024 rebates
The Canadian government is sending out the last carbon rebate of 2024. See who’s eligible and how much you...
Personal loan versus line of credit: Which should you choose?
Need the best interest rate? Want fixed payments or flexibility? Find out the differences between personal loans and lines...
Driving underwater: Is your car worth less than what you’re paying for it?
Canadians who financed or leased their new vehicles in the last two years could be paying more in loans...
How to buy a car in Canada and get the best loan rate
Buying a car is a big deal. Understand the financial part of the purchase and, hopefully, save yourself some...
The best credit cards in Canada with free roadside assistance for 2024
Roadside assistance is something you never think about—until you need it. Having one of these credit cards will ensure...
The best store credit cards in Canada for 2024
If shopping is your hobby, or you want discounts on everything—from groceries to a new car—check out this list...
Is it a good time to buy a new car?
Vehicle supply is building, and prices are going down. Here’s why the stars may be aligning for new car...
Honda Accord review: The best used car for families
If you need a roomy, reliable and fuel-efficient ride, check out our pick for the best pre-owned family sedan...
Toyota Corolla review: The best used small sedan
The Corolla is Toyota’s bestselling vehicle, as it’s easy to see why. Here’s what to look for when buying...