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this padlet is going to be about the difference between buying and leasing and the pros and cons of buying and leasing. 

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this padlet is going to be about the difference between buying and leasing and the pros and cons of buying and leasing. 

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this is a video by Dave Ramsey that discusses the difference between buying and leasing a vehicle. in this video Dave Ramsey talks to a man named Marty about if he should lease or buy a vehicle. in this video Marty tells Dave Ramsey about his situation and if its better to lease or buy a vehicle. i decided to choose this video because he gave good advice to Marty about if he should buy or lease a vehicle. in the video Marty says he has 25,000$ saved up and Dave Ramsey said he should buy a 15,000$ car and then focus on re building his savings which i think is very good advice. this is why i decided to choose this video.

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this is a video by a man named Marko. in this video Marko discusses the pros and cons of buying and leasing a vehicle. Marko goes in depth about how much it would be to lease a vehicle vs buying a vehicle. i decided to choose this video because i find it very helpful for people that do not know if they should lease or buy a vehicle. marko mentions at the end of the video that leasing is a lot more expensive than buying because your paying more for a car you dont even own plus you have to worry about maintenance and how many miles your putting on the vehicle and he says he would rather buy a car which i agree with this is why i chose this video

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Buying vs. Leasing a Car (Pros and Cons)

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this is a video by a man named scotty Kilmer. in this video scotty Kilmer talks about why leasing a car is stupid. scotty talks about some advantages of leasing a car such as lower monthly payments and being able to drive newer and nicer cars for a lower monthly cost than buying a car. scotty also talks about the disadvantages of leasing a car such as not being able to mod it out and having milage limits. i decided to choose this video because he goes in depth about both the advantages and dis advantages of leasing a car and this is a helpful video for someone who doesnt know if they should lease or buy a car.

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this is a video by a man named george kamel. in this video george kamel talks about the same thing as scotty did in his video, why leasing a car is stupid. in this video george starts it off by explain what exactly a car lease is. george then goes on to talk about how lease payments are calculated. after that he then goes on to talk about why leasing a car is "sketchy". he then goes on to talk about how you can get out of a lease and all the options cost a lot of money. he then concludes the video by saying "leases are the most expensive way to pay for and operate a car". i decided to choose this video because he covers pretty much everything you need to know about leasing a vehicle and why it is not the best idea to do so.

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this website talks about the pros and cons of leasing or buying a car. this website contains information on the difference between buying and leasing a vehicle. the website shows the pros of leasing a car such as lower monthly payments, driving a new car every 3 years, worry free maintenance, no resale worries, and potential for tax deductions. and also the cons of leasing a car such as no ownership, lack of control and fees and other costs. this website also shows the pros of buying a car such as no restrictions, total control and long term costs and the cons of buying a car such as driving costs and rapid depreciation.

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Should you lease or buy a new car? Typically, the choice comes down to priorities. For some drivers, it's purely a matter of dollars and cents: Which is the less expensive option right now? For others, it's about the benefits of ownership.

Before choosing the road you go down, it's important to understand the key distinctions between leasing a car and buying one.

Lease or Buy a Car: What's the Difference?

When you lease a vehicle, you pay to drive it for a certain length of time. The average lease is 24 or 36 months, although you can find even longer leases. Restrictions apply to how many miles you can drive and modifications that you may wish to make to it. Various fees will apply.

Once your lease period ends, you have the option to return the vehicle to the dealer or purchase it at a predetermined amount, as defined in the lease contract.

When you buy a car, you immediately take title to it. You own it outright if you pay for it with cash or after a loan is paid off if you finance your purchase. You maintain control over all aspects of the vehicle and ultimately can keep it, trade it in, sell it, or give it away.

Pros and Cons of Leasing

Lease payments are generally lower than the monthly loan payments for a new vehicle. They depend on these factors:

Sale price: This is negotiated with the dealer, just like with a vehicle purchase.

Length of the lease: This is the number of months that you agree to lease the car.

Expected mileage: The lease sets the maximum number of miles that you can drive the car each year. Most leases come with the choice of a 12,000- or 15,000-mile annual allotment. The monthly payment will increase slightly if you go for the higher yearly mileage. If you exceed the mileage limit in the contract, then you will be expected to pay the dealer for every extra mile at the end of the lease.

Residual value: This is the vehicle's value at the end of the lease, with its depreciation figured in. If you decide to purchase the vehicle once the lease expires, this is the amount that you will pay.

Rent charge: This fee is shown as a dollar figure rather than a percentage, but it is the equivalent of an interest charge.

Taxes and fees: These are added to the lease and affect the monthly cost.

Some dealers or the manufacturers that they represent require a down payment for a lease. The more you put down, the lower your lease payment will be.

Keep in mind that it may not make sense to put too much cash down on a vehicle that you'll ultimately be handing back to the dealer. If you're quite sure that you're going to buy it when the lease expires, the down payment will reduce the cost of purchase.

Lower Monthly Costs

A lease can slightly ease the financial burden of monthly costs. Leasing usually involves a smaller down payment compared to buying. Due to this, some people opt for a more luxurious car than they otherwise could afford.

New Car Every Few Years

For many people, there's nothing like the feeling of a brand new ride. When a lease is up, you can return it and get your next new car. By leasing, you also get the latest advances in car technology every few years.

Worry-Free Maintenance

Many new cars offer a warranty that lasts at least three years. So when you take out a three-year lease, most of the repairs may be covered. Leasing arrangements can potentially eliminate some significant, unforeseen expenses.

No Resale Worries

You simply return the car (unless you choose to buy it). The only thing you have to worry about is paying any end-of-lease fees, including those for abnormal wear or additional mileage on the vehicle.

Potential for Tax Deductions

If you use your car for business purposes, a lease may afford you more tax deductions than a loan. That's because the Internal Revenue Service (IRS) allows you to deduct both the depreciation and the financing costs that are part of each monthly payment. If you're leasing a luxury automobile, the amount that you can write off may be limited.

No Ownership

The mileage restrictions of a lease can impede how much and how far you wish to drive. Moreover, drivers who would like to make modifications to their vehicles should understand that fees may apply. For example, there may be additional costs at the end of the lease due to the need to reverse any changes that they make.

Lack of Control

You can't sell the car or trade it in to reduce the cost of your next vehicle. Plus, since you'll start a new lease when one expires, you'll always have monthly payments and an ongoing lack of control over certain aspects of a vehicle.

Fees and Other Costs

Fees in your lease contract apply to excess mileage, modifications to the car, and excess wear and tear. There's also an early termination fee if you decide to end the contract early and an acquisition fee (also called a lease initiation fee).

Once the contract ends, you may have to pay a fee to cover what the dealer pays to clean and sell the car. Finally, unless the lease includes gap insurance, you may also owe costs related to accidents you may have had that your insurance doesn't cover.

Ultimately, it's more expensive to lease cars for the long term instead of buying one and using it for years.

Pros and Cons of Buying

When you buy a car, you can keep it for as long as you choose to. Usually, you'll make a higher down payment and slightly higher monthly loan payments (if you finance your purchase) compared to lease payments for the same car.

However, there are ways to reduce these amounts-consider buying a less expensive new car, a certified pre-owned car, or a used car.

Perhaps you've saved and invested money with a car purchase in mind. If you can afford to pay the entire cost of the car in cash, all the better as far as the ultimate cost.

Monthly car loan payments are calculated based on the sale price, the interest rate, and the number of months it will take to repay the loan.

No Restrictions

Unlike leasing, you're not obligated for fees related to mileage and wear and tear on the car. Since you own it, you pay for service and repairs on your own time line.

Total Control

You also have complete control over how you improve your car or, for instance, modify its appearance. If you financed its purchase, once that loan is paid off, you can keep it until it dies, trade it in, sell it outright, or give it to a family member. You get to decide.

Potential for Tax Deductions

If you use your car for business as well as personal reasons, the IRS allows you to deduct costs and depreciation related to that business use. You must keep careful records to support your filing, so be sure that you fully understand what's involved.

Long-Term Cost

It's cheaper overall to buy a car and hold onto it for as long as possible.

Rapid Depreciation

New cars can lose 15%-25% of their value in the first five years of ownership. If you consider your car an investment, then this is a disadvantage. However, if you are the type who buys and keeps a car for years, then it shouldn't matter.

Driving Costs

According to a 2022 study by AAA, the cost to drive a new car for about 15,000 miles came to $10,728. Costs included fuel, insurance, and maintenance.

Leasing vs. Buying Summary

Pay to drive a car for a specific time frame; no ownership

Own and drive for as long as desired

Lower or no down payment and monthly payments

Usually higher down payment and slightly higher monthly payments

Get into a luxury car at less cost

Higher cost for more expensive cars

Get automotive advances with every new lease/new car

Restricted to car's technology until new purchase or upgrades you initiate

Turn in (or buy) car when lease is done

Must arrange trade-in or find buyer if you wish to sell

Restrictions on miles allowed and modifications to car

No mileage restrictions

Various fees can bump up cost at end of lease

No special fees

All costs aren't known until lease ends

Costs are known/can be projected

Higher cost over long period of time and multiple leases

Lower cost when bought and kept

What are the advantages of leasing?

Leasing allows a person to get a new car every few years. It can keep their payments relatively stable when leasing the same make and model of car over various leases. Leasing also frees the lessee from having to dispose of the car at the end of the lease term.

What are the disadvantages of leasing?

The main disadvantage of leasing a car is that you never own it. You don't build equity in the vehicle as you make lease payments. Lease terms can be anywhere from two to five years. A lease can be ended early, though early termination typically involves a cancellation fee.

What's the difference between buying and leasing a car?

When you buy a car, you either pay cash or finance the purchase with a car loan. You take title to the vehicle. If you finance the car, you build equity in the car over time.

When you lease a car, you make lease payments that allow you to drive the car but never take title to the vehicle or build equity. When the lease term is up, you return the car to the dealer.

The Bottom Line

Deciding between leasing and buying a car will come down to your lifestyle, driving needs, and financial situation.

Leasing can be attractive if you're looking for lower monthly costs, want a new car with new car technology every few years, and don't want to worry about certain tasks, such as selling your car. Leasing can also put you into a luxury model that otherwise might be out of reach.

Buying a car means you'll either own it outright if you paid cash or build equity in it as you pay off a car loan. You'll have total control over your expenses and can service or repair it according to your needs. You'll have the freedom to drive as much as you like, modify your car, and dispose of it in on your terms.

In the long run, buying has proven to be a better financial decision.

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Pros and Cons of Leasing or Buying a Car

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Leasing a car isn't for everyone. But it's attractive for those who want lower payments and the ability to get a new vehicle every few years.

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this website talks about the pros and cons of leasing a car and also the pros and cons of buying a car and what option would be better for you. this website contains information on the difference between buying and leasing a vehicle. i decided to choose this website because it goes in depth about the upsides and downsides of both buying and leasing a car which can help people that do not know if they should lease or buy a car make the right decision. this is the reason why i chose to add this website to my padlet

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To lease or to own? That's the question facing every driver in the market for a new car. The issue is surprisingly divisive, with die-hard supporters on each side.

Lease-lovers adore getting a brand new, shiny car with the latest technology every few years, while owner-advocates are willing to pay higher monthly payments now, for the promise of paying $0 in the future.

Leasing a car means you only pay for the portion of the car you use. You pay the dealership to drive the vehicle for a predetermined amount of time, usually around two to four years. The payments are a mix of principal, interest and taxes. It's usually cheaper than taking a loan out to own the car because you're only paying the depreciation costs of the vehicle over the period of time you are driving it.

In contrast, when you buy a car, you take out a loan for the entire sticker price of the vehicle plus taxes minus your down payment. Your monthly loan payments will be higher than if you were leasing the same car. But the difference is, at the end of the day, when you've repaid your debt, you have an asset. That asset is yours to keep, sell or pass on.

Scotiabank proudly finances vehicles for consumers for several car manufacturers across Canada, including on an exclusive basis, for Mazda, Jaguar Land Rover, Volvo and Polestar.

Whether to own or lease depends on your lifestyle, cash flow and preference.

Let's talk about the emotional factor of leasing first. One of the main perks of leasing is you're potentially able to get a shiny new car for much cheaper than it would cost to buy one over the same term. Only you can decide how important this is to you. If you really love cars and are excited by the latest technology and top-notch performance, these factors may be worth more to you than owning a car.

The second benefit to leasing a car is that it's cheaper in the short term. If you have a tight or uncertain cash flow, you may appreciate lower monthly payments. In order to get similar low monthly payments from an auto loan you may need to extend the loan period to the maximum, sometimes up to eight years - which isn't a great idea because of the added interest you'll need to pay or you will need a large down payment to bring the finance amount down.

The third advantage is flexibility. If you move a lot or aren't ready to commit to a vehicle then why not lease it for three years until you're prepared to commit?

Leaseholders also love that they can just hand the car back at the end of the term and walk away. If you don't want to deal with car maintenance over the long term or who do not want to haggle over trade-in values, leasing may be your best option.

Finally, most leases in the marketplace are typically referred to as 'walk-away' leases because the value at the end of your lease, known as the residual value, is guaranteed. Therefore, if you make your payments and return the car in good condition and within your kilometre allowance, you can drop the keys and walk away.

But leasing may also have disadvantages, like the fact that you will always have a monthly payment. When you own a car, at some point your loan will be paid off and your payments will cease. So while lease payments may be cheaper in the short term, they almost always are more expensive over time because they never stop as long as you keep getting a new vehicle every 2-4 years.

The second drawback is that you have to return your car in roughly the same condition you bought it in. Most lease options allow for normal wear and tear during the term of your lease but may require certain items to be repaired or replaced if there is excess wear and tear. Ask your dealership to clarify what constitutes excess wear and tear as many have brochures available to help distinguish normal from excessive.

The costs to fix it and the hassle of doing so can really add up. There are some products the dealership can sell you when you originally lease the vehicle which can cover for some damages prior to the end of lease term. Make sure to ask a lot of questions about the cost as well as what would be covered versus what is not.

And depending on your lifestyle and how often you drive, you may exceed the allowable kilometre limits; a standard lease allows for 24,000 kilometres per year while some manufacturers offer low or ultra low kilometres options, which are generally around 15 to 20,000 kilometres annually. Those doing inner city driving should be okay within those limits, but those who are visiting friends and family who live further away may be hard pressed to stick to them. If you think you may go over your allotted kilometre allowance, there are options to purchase additional kilometres upfront; if not, you will get charged per every kilometre you go over your allowable limit.

Some people just want to have a car and keep it for as long as possible until it starts needing costly repairs. If you simply need a reliable vehicle to get to work in and drive your kids around in, there's little point to owning a new car every few years. The best way to become payment free is to have a large down payment, find a low interest rate and choose the shortest financing period you can afford. You can check out our auto loan payment calculator to see the difference a shorter time period makes. If you don't have a large down payment or are new to the market your deal may have programs available to assist as well.

Let's say you buy a $25,000 vehicle with $5,000 down at 2.99%. If your loan lasts three years, you'll end up paying around $1,090 in interest. If you push it to the maximum eight years, you'll end up paying $2,920, or 168% more.

Newcomers may also use auto loans to build their credit history - Scotiabank, for example, offers the StartRight Auto Finance program where you can qualify for a loan with no Canadian credit history.

Once your loan is paid off, and assuming you've chosen a well-made car that's built for the long term, you can easily drive it for years after the loan is paid in full. That's a long time without car payments and you can direct that cash flow elsewhere. Of course, you may get into an accident or need to make repairs, but the money to deal with that is almost always less than a car payment would be.

And since it's yours you don't have to fix anything on it that you don't want to and you can drive as many kilometres as you need. You also don't have to worry about keeping it pristine if you don't want, because it's yours.

Like anything you own, you're responsible for it. Many cars, unfortunately, are not built to last forever and the maintenance can get expensive once your warranty expires. You may find that the maintenance costs for some of the larger mechanical repairs can become truly astronomical and may want to consider purchasing an additional warranty to extend the manufacturer's warranty.

Another downside is the depreciation of your vehicle. Some cars have higher depreciation than others and this may affect whether you can trade in your vehicle or not, as you may have to pay off more of your loan to be in an equity position (your car is worth more than you owe). If you want to trade in or trade up, you might be surprised at how little value your car truly holds after a few years.

Ultimately, leases are good for those who want more flexibility. They want to drive the latest vehicle, pay a reasonable monthly rate and trade it in for the next hottest thing in three years. Buying a car is good for those who like to keep their cars for a longer period of time or drive lots of kilometres each year. They're in it for the long-term and have the cash flow and motivation to pay off their auto loan as soon as possible. Check with your dealer and ask lots of question to see what the best option is for you.

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Planning to get a car and thinking about whether to buy or lease? Here are some pros and cons to help you make the final decision.

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this website talks about everything you need to know about leasing a car in canada. this website answers multiple different questions about leasing a car in canada such as what is a lease?, is leasing a good deal?, how do i know if a lease is right for me?. this website also tells you what you need to qualify for a lease and the steps you would need to take if you wanted to end a lease early. i decided to add this website to my padlet because it answers a lot of questions that people may have about leasing a car.

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Should you buy or lease your next new car? It's a question that Canadian drivers have long been asking themselves. The lower payments and lack of commitment that come with a lease can be enticing, and for certain people car leasing is a great fit. However, it's important to understand what you do and don't sign up for when you choose this type of payment structure.

Here's a look at the pros of cons of leasing a vehicle in Canada.

Leasing a Car in Canada: What You Need to Know

What is a Lease?

The most important thing to understand about leasing is that you don't own the vehicle at the end of the lease. Leasing a car rather than financing it is essentially the equivalent to renting a home instead of paying a mortgage: a lease is an agreement between you and an automaker to give you exclusive use of a new vehicle for a contracted period of time, usually two to five years, in return for a monthly fee. At the end of the agreement, the vehicle is returned to the dealer, final financial agreements are settled, and the lessor drops the keys and walks away with no strings attached and nothing to show for it. Some people see this as a good thing because they aren't tied down to a vehicle long-term, while others prefer to own something once their monthly payments end and find that leasing isn't a good fit.

Is Leasing a Good Deal?

It can seem to be since the leasing often comes with lower monthly payments than financing options, depending on the payment terms. However, those payments equate to you covering the cost of the vehicle's depreciation, plus taxes and fees over the period you're using it, sometimes while also paying a higher interest rate. At the end, all you have is temporary use of a car with nothing to own, sell, or use as a trade-in for your money spent. Plus, leases hold potential for surprise charges. An agreement with a leasing company will list a kilometre limit for how far the vehicle can be driven each year, and putting more kilometres on the car can result in hefty overage fees if you don't buy a package to cover those additional kilometres in advance. You can also be dinged with surprise fees if the dealership finds evidence of damage or neglect when you return the leased vehicle.

How Do I Know if a Lease is Right for Me?

Consider a lease if:

You change cars often because you like to try new things. If you're the person who always waits in line for the latest iPhone on release day, leasing a vehicle might be a good choice for you because it lets you drive the latest and greatest new vehicles without having to deal with a sale every few years.

You don't drive a lot. Closing a lease can come with surprises expenses if you've gone over your kilometre allotment. If you're very confident you won't approach those limits because you drive infrequently and in predictable patterns, then leasing may make more sense. If you're very sure you won't come anywhere near the limit named in the lease agreement, you may even find that you can lower your allotment and have your payments reduced.

You don't like dealing with the problems that can arise in vehicles long-term. By nature, leases cover the earlier part of a vehicle's life, which tends to be the part before major issues come up and most that do are covered by warranty. It's as a car gets older that it will need to visit the service department more often, so a steady rotation of leases can avoid some of those maintenance headaches that come with a used car or longer-term ownership.

A Car Lease May Not be Right for You If:

You want the financial benefits that come from keeping your vehicle for longer. Once a financed vehicle is paid off, it can be driven for the rest of its usable life for just the cost of fuel, maintenance, and insurance. Plus, since you own that vehicle, you can sell it to gain a down payment to go toward your next one. Leasing a vehicle means you'll always have monthly lease payments and you're giving up the financial cycle that's created through building equity, and that cycle becomes increasingly beneficial the longer you keep a car on the road.

Your driving patterns are unpredictable. If you're the sort of person who likes to pick up and drive across the country during the summer or who often visits family members who live a distance away, you may find the kilometre allowances of leasing to be restrictive. A higher count on the odometer means that the vehicle comes back from its lease with a lower residual value, which is the dollar amount that the car is worth at any given point in its life cycle. Automakers price leases so that you're covering that loss in residual value, not them. This means that no matter whether you buy additional kilometres up front as an add-on or pay them out at the end, making up the difference will be expensive.

You want to make any changes to the car whatsoever. A lease agreement will stipulate that the car cannot be modified and must be returned in the same condition in which it was supplied, apart from reasonable wear and tear. If you're the sort of driver who likes to customize anything at all about your vehicle, then you're better off owning it rather than risking extra charges at the end of your lease.

What Will I Need to Qualify for a Lease?

You'll need to have an above average credit score, so it's a good idea to check it yourself online before going into the dealership so that you know what you're working with. You may also need a down payment, and it's a good idea to provide one even if it's not strictly necessary as it will increase your chances of being approved and lower both your monthly payments and the amount of interest you pay over the course of the agreement.

What If I Need to Cancel My Lease Early?

Before signing a lease, read this disclaimer: getting out of it before the end of the lease term is not easy. You'll either need to pay it out as stated in the agreement - which can be as much as paying the equivalent of every monthly payment still due - or you can try to find someone to complete a lease takeover with you. There are services that will help you make these connections, or you can seek out willing takers on your own through social media or online classifieds.

The person taking over the lease will need to be approved by the automaker's financing arm, and you may also need to pay cancellation or other administrative fees. It also usually helps for the lessee to sweeten the deal for the person taking it over by offering an incentive such as covering a month or two of payments. That person will rightly be hesitant to move forward if you've already exceeded the average yearly kilometre allowance or modified the vehicle in any way, which is even more reason not to take on a lease unless you're certain it's the right fit for you and your lifestyle.

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Leasing a Car in Canada: What You Need to Know

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this website is a detailed guide on buying cars in canada. this website talks about steps to take when buying a car, this website also talks about what MSRP is, what a down payment is, how to negotiate car prices, when the best time to buy a car is, basically everything you need to know when your looking to buy a vehicle. this website also goes over the pros and cons of buying a brand new car and the pros and cons of buying a used car. i decided to add this website to my padlet because i find this website very helpful to people who are looking to buy a car and dont know that much about buying cars.

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In Canada, there are lots of decisions to make when you're buying a car. There's so much to choose from! You can buy anything from new or used, domestic or imported! You also have the choice of how you pay for the car; you can buy it outright, finance it with a car loan, or lease it.

If you've done your research and decided that a new car is right for you, the next step is to understand how buying a new car works. Once you understand it, you can be strategic with your negotiations and purchase.

How to buy a new car in Canada

A car is a big purchase, one of the biggest you'll make in your life. To help you navigate the process, here is a walkthrough of all the steps you go through:

1. Plan. Determine what you can reasonably afford and what you will get for your money. This involves considering items like depreciation, taxes, insurance, reliability, registration fees, and fuel economy.

2. Research. The next step is to research the car you'd like and what will work for your lifestyle. Google and YouTube is where most people start.

3. Find the Car. You want to find a good deal at a car dealership nearby, manufacturer's websites, third party listings, and advertisements. As a general rule, you shouldn't walk into a dealership before doing at least a little bit of homework on the type of car you want.

4. Test and Inspect. Before making any car purchase, it's good practice to inspect and test the car. After all, you want to make sure the car doesn't have any defects or other issues by looking it over and giving it a test drive.

5. Buy. Once you find the exact car you want, it's time to negotiate the purchase price with the seller and get your payment together. This is where you must decide to buy outright or apply for a loan and pay for the car with monthly installments.

6. Prepare to Drive. Now that the car is yours, you will need to get insurance, ownership registration, and license plates.

7. Drive. Once everything is approved and paperwork is signed, you can now drive your car off the lot and enjoy!

Getting pre-approved for a car loan is the easiest way to buy a car in Canada

Going through all the steps mentioned above to buy a car is a lot of work, and it takes a lot of time. Luckily there is a faster and easier way to successfuly find a new car that fits your budget and your lifestyle.

By getting pre-approved for a car loan you will know exactly what your budget is, so you can avoid wasting time researching and shopping for cars that you won't be able to qualify for.

Companies like Canada Drives can get you pre-approved online, and will even connect you with a dealership in your area who has a selection of quality vehicles available within your pre-approved budget. So you can save time and energy by not having to do the searching yourself, and there is no fear of rejection when it comes to actually financing the car you want.

A quick guide to car pricing

New cars aren't cheap, as you probably noticed! For this reason, understanding all the pricing and the nature of the new car business is extraordinarily helpful. It's easy to get caught up in the moment and excitement of buying a new car, and you might make the wrong financial decision as a result. On top of that, pricing is one of the most important steps of the purchasing process. Let's explore all the facets of how new cars are priced and the costs you will incur when making a purchase.

What is MSRP?

MSRP stands for the manufacturer's suggested retail price, which is also referred to as the window sticker and list price. In other words, the MSRP is the price set by the manufacturer and is often the price that car dealers would prefer you pay. Although, for new car prices, Canadian car dealers tend to sell for much lower than the MSRP. The only time a dealer would be adamant about selling a new car for the MSRP is for high-end vehicles that are in demand with little supply.

The MSRP doesn't include sales tax or additional dealership fees. In a way, these fees are hidden because they're not reflected in the MSRP so you don't know what the final price will be. This is important to consider when budgeting. In Canada, sales tax is easy to determine. Goods and Service Tax (GST) is 5% which is set by the federal government. On top of that, you will also need to pay Provincial Sales Tax (PST) which varies by province or territory. Look up your region's PST rate to determine what you will pay. As for the additional dealership fees, you will need to inquire with your car dealer about the exact fees.

What is a down payment?

A down payment is a percentage of the car's total price that is paid upfront as a part of the initial purchase. Usually, the down payment percentage is between 10% and 20%. The more you put down, the less you have to finance.

Down payments add up to a lot of money and aren't a requirement, but it definitely goes a long way. By making a down payment, you often pay less interest, offset depreciation, get approved quicker and easier, access special deals and have lower monthly payments. The larger the down payment, the more you can take advantage of these benefits.

As mentioned, down payments aren't a requirement. This is good to know because not everyone can afford the hundreds of dollars that make a down payment, nor do they have the time to save up for one. If a down payment isn't right for you, consider getting a co-signer or working on boosting your credit score before applying.

Negotiating a new car price for the best deal

Obviously you want to get the best new car deals Canada has to offer, otherwise, you wouldn't be here! The question becomes, how do you obtain a great deal? Fortunately, when negotiating a new car price, Canada has a lot of flexibility and options. Let's take a moment to understand the business of selling new cars before we discuss getting a great deal.

Car dealer's aim to sell new cars for the MSRP, but the MSRP isn't what they paid to get the car. The car dealer actually paid a lower amount known as the factory invoice or invoice price. Of course, the car dealer wants to profit on the sale, which is the difference between the MSRP and the factory invoice price. Knowing what the car dealer paid for the new car you want is a great starting point for negotiating price and getting a great deal. Before heading to the dealership to negotiate, do some research on the price to the car dealer to ensure you're prepared to discuss pricing options.

Another thing to consider when looking for a new car deal is the applicable factory rebates. Factory rebates further lower the price that car dealers pay. After you figure out the factory invoice price, deduct any factory rebates from that price to determine the true price the car dealer paid.

Now that you understand how the pricing and profiting of new car sales works, it's time to negotiate with car dealers. Keep in mind that car dealers aren't going to settle for breakeven. They'll want to profit a little, but they'll very likely settle for a price less than the MSRP. Car dealers usually aim for a 10% profit, that's a good starting point for your negotiations. Negotiating is entirely possible, you just need to have the appropriate information to play your cards right!

What about manufacturer incentives?

Manufacturers offer incentives to car dealers that aren't advertised or public information, as we saw above. On the other hand, manufacturers also offer incentives directly to the consumers which are heavily advertised. Manufacturers offer these incentives to consumers to stimulate sales. Examples of incentives you might see are low financing or leasing rates and cash rebates. These incentives can help you get a better deal, make sure to do some research so you know what manufacturer incentives are out there.

When is the best time to buy a new car in Canada?

When it comes to purchasing a new car, timing really is everything. Car dealerships adjust the pricing of their cars throughout the year for various reasons. November is the best time to get the cheapest new car in Canada. This is because car dealerships are making room for newer car models that are coming in over the next few months. Therefore, they're trying to get rid of "older" inventory. Even though these cars are considered "older" they're still brand new and have never been driven, you're just taking advantage of the sales season in November!

In addition, at the end of the month, car dealers will be pressed to meet their monthly sales quota. Because of this, the salesperson will be more inclined to give you a deal to meet their quota on time.

Last but not least, keep an eye out for purchase incentives around special events such as Boxing Day or Black Friday. Car dealerships get into the spirit around these holidays just like other companies do!

Buying a new car is a lengthy process that requires patience and lots of consideration. Below are some additional tips and tricks to consider during the process.

Reach out to multiple car dealerships to understand the competitive pricing first hand. There's nothing wrong with getting multiple offers from different dealers!

Before anything, consider your budget and what you can realistically afford. If car dealers aren't working with your budget, be prepared to walk out and find a better deal. Getting pre-approved financing can help you stay on a budget as well.

Car dealers tend to get customers to focus on the monthly payment, not the actual car price, to close the deal. Stay focused on the total car price, other incentives can be discussed after the car price is agreed upon.

New cars versus used cars

If you're determined to enjoy that brand new car smell, then go for it! But if you're on a budget, the pre-owned car market is a cost-effective solution that you should explore. There are excellent savings to be made on used cars versus brand new cars.

Here are the advantages and disadvantages of new vs used cars.

New Car Advantages vs Disadvantages:

Brand new cars come with a warranty that helps with maintenance in the first few years.

Depreciation is a killer with new cars, the minute you drive it off the lot it loses significant value. You will never get back the lost money from depreciation either.

You will benefit from the latest technology with new cars, such as ideal gas mileage, lower emissions and fancy entertainment systems.

New cars are expensive. You can benefit from some of the manufacturer incentives and lower interest rates, but it doesn't change the high price.

Used Car Pros and Cons:

There's no need to worry about a big depreciation hit with a used car. The previous owner took the hit for you!

Lack of reliability and functionality is a concern with older used cars. You don't really know how the car will perform until you buy it.

Used cars are more affordable, and just as reliable as a brand new car if well maintained

Repairs and maintenance costs might be more frequent than with a brand new car.

Can I get a new car with no credit or bad credit?

Getting a brand new car with no credit or bad credit is challenging, but not impossible. In order to get a brand new car, you may need to jump through some hoops such as paying higher interest, go with an alternative lender, put more money down upfront, work on your credit score to get better terms or get a co-signer with good credit.

Looking for a great deal?

Buying a car that is 2-3 years old can often result in the best deal. Typically a car of this age will still have low milage and will be in great condition, and often it will still be covered by the original warranty - so you don't have to worry about any repair costs in the near future.
The most important difference is that you will avoid the depreciation cost that comes with a new car.
The average depreciation rate for a new car in Canada is 20%, with another 15-20% each following year. So buy purchasing a car that is just 2 years old you could save over 30%!

If you are financing a car it is wise to get pre-approved for your car loan first. This is an easy way to figure out what your real budget is, and will allow you to shop with confidence and save time by only looking at cars you know you qualify for. There is nothing worse than spending weeks researching and finally finding a car you love only to get rejected in the finance office.

Canada Drives can get you pre-approved online for a quality used car today. It's free to apply and only takes a couple minutes to complete the online application. Get pre-approved here.

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Buying a New Car in Canada: The Ultimate Guide | Canada Drives

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The only guide you need to purchase a new car. Learn the process, pricing and negotiation strategies, how to time your car purchase, and the pros and cons of choosing a new car vs used.

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this image showcases the difference between buying and leasing a car. i decided to add this image to my padlet because i find it helpful for people that dont know if they should buy or lease a car.

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this image showcases the best time to buy a car. i decided to add this image to my padlet because i find it helpful for people who want to buy a car but dont know when they should buy a car.

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1. one thing i learned about my topic that suprised me was that when you lease a car you can only drive a certain amount of kilometers in the car or else you will need to pay extra fees.

2. this topic is relevant to me because this is all stuff you need to know when buying or leasing a car and there is going to be a point in my life where i need to get a car so this information is good to know for when that time comes.

3. if i had to pass on my knowledge to family or friends i think the most important thing to pass on is the pros and cons of buying and leasing a car.