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Hi welcome to my padlet. This padlet will be about Buying vs. Leasing and what's the best choice you can make based on your financial situation. The padlet is organised by columns with each pertaining to a specific part of the project.

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This website is from Canada Drives LTD. This website starts with a brief introduction about how typical Canadians spend money on cars. Then goes on to explain the difference between leasing and financing and describing how each agreement works. It also describes their benefits and possible considerations.
The reason I chose this website is because I believe it has a lot of really useful information for people looking to purchase a car. it provides useful information for all aspects, and even a link to speak to experts on the topic. I also believe this is a great website to new buyer to obtain useful information on the subject laid out in a simple manner

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The Easiest Way to Buy or Sell a Car

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The Easiest Way to Buy or Sell a Car | Canada Drives

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Canada Drives is the easiest way to buy or sell a car. Get pre-approved for your next purchase or get an instant quote to sell your vehicle directly to Canada Drives.

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Unlike the first website that is on this list this is a tool to help you assess what would be a better option. This web-page is a buying vs. leasing calculator, you enter your information and it will show you a graph comparing the two total costs. The website includes useful descriptions for almost everything you need to enter, so if you unsure what it's asking for you can read about what it is.
The reason I picked this website is because it offers very useful utility and can be useful to first time buyers and longtime buyers. The website is easy and fast to use.

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Should you lease or buy your car? Use this calculator to find out! We calculate your monthly payments and your total net cost. By comparing these amounts, you can determine which is the better value for you. Javascript is required for this calculator.

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This website is from goauto and goes over the differences between leasing and buying. The website begins with a fairly simple breakdown of what you should be concerning with both options like financial stability and long or short term use. Then it moves on to a few diagrams detailing comparisons between the long term, medium term, and short term of leasing and buying. Also it talks a bit about credit score and how it effects lease and finance rates.
I chose this website because it has easy to follow graphics and talks about credit score.

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This video is by Marko- WhiteBoard Finance. In the video he discusses how to choose between buying and leasing. In the video he goes in depth and shows the math behind the decisions you should make, showing the main financial differences between buying and leasing. His math shows that in almost all situations it is financially better to chose to buy instead of lease. He then discusses his opinion on the matter and why he believes buying is the better option in most scenarios and what scenario you might finance.

The reason I chose this video is because it shows you the math behind everything and why you should make certain decisions.

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Buying vs. Leasing a Car (Pros and Cons)

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This video is by AutoVlog. and in the video he discusses leasing vs buying an car and why he personally leases. He discusses why leasing can be ideal for people that want a new car every few years  and don't dive too far. He then discusses an example of when leasing would be better based on his experiences selling cars. Then talks about when it would be better to buy a car and how if you keep a car for a long time it's worth buying

The reason I chose this video is because it looks more into the leasing side of things and which scenarios it's a better idea.

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Buying VS leasing a car - Which is the better option ? ( Don't get ripped off)

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This video is by Victor A. Paredes. and discuses the differences between leasing an buying giving different points for each. First he discusses leasing and how it gives you lower payments and a new car every 2-3 years with a gap insurance. He discusses how it can be better to lease for many people. He also show some math and talks about how cars are depreciating assets. He then discusses financing a vehicle and how you still wouldn't own it unless you bought it outright.

The reason I chose this video is because it goes more into how leasing works and what it's benefits are.

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The Truth About Leasing vs Buying a Car | 2018

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This video is by Next Level Life. the video discusses both sides of buying and leasing. First he discusses leasing and the upsides and downsides, he shows that leasing can have a lower monthly payment but also can have many restrictions. He then shows a lease calculation and goes over how it works and what you need to calculate it showing how it all adds up. And after he goes over effective interest rates of leases and compares it to buying a car.

I chose this video because it goes into the math of leasing a car and how it's all calculated. He also show exactly how to calculate so you can yourself.

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Leasing Vs Buying A Car (Pros and Cons) | How to Calculate a Car Lease Payment

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This chart goes over many of the important things to think about and the pros and cons of each form of purchase.

I chose this picture because it give a good base line on what to think about when deciding between the two options.

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This picture shows a graph between the costs of leasing and buying. you can see that in the long term it is definitely more cost effective to buy.

I chose this image because it's a great graphic showing the long term costs.

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This website is from howtosavemoney and goes over some of the important aspects of buying and leasing. First the website goes into the different pros and cons of buying and leasing such as "You can upgrade your car each time your lease is up. and Lower monthly payments." for leasing, and "You can modify your car as you please. and You can put as many miles on it without getting hit with a fee" for buying. then it goes into how buying a car works and some of the math behind it. Then does the same for leasing. the web page also looks at used vs new buying and how that factors on too.

The reason I chose this website is because it also considers buying used cars and this can change the way you think about buying and leasing.

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Buying a car can be exciting - sometimes too exciting.

With all the distractions and offers that the salesperson throws at you, it can be easy to lose track of the very basics of the transaction.

You have so many options - buying vs leasing vs financing, new vs used, trading in your old car or trying to sell it online ...And each of these means a lot of money is on the line.

So before you go in and let a salesperson talk you into something that you don't really know much about (yet!), do your research ahead of time.

There are 3 huge decisions you'll have to make before you even start thinking about what kind of car you want:

Buying a car vs leasing vs financing

When I was looking for a car a few months ago, I was surprised at how pushy some of the dealers were about leasing, even if I made it clear I wanted to own my car.

Toyota was especially adamant about it - the salesman told me more than 80% of people who leave with a car are leasing it. I'm not sure if this is a real statistic, but his insistence on leasing made me think that maybe there's something a bit fishy about it...

The pros and cons of leasing vs buying

So here are some pros and cons of leasing a car vs buying it (either through finance or cash).

Pros of leasing a car

You're always driving a recent model car.

You can upgrade your car each time your lease is up.

You can usually afford a higher-price car than you would financing it.

Your warranty never runs out.

Lower monthly payments.

Cons of leasing a car

You'll never own the car (unless you buy it outright at the end).

Monthly payments could virtually go on forever.

Always have to worry about mileage and the condition of your car, since you agreed to specific terms in the leasing contract.

Can't customize the car in any way.

End up paying more money long term.

Get nothing out of it once your lease is up - you haven't made any progress towards paying it off, just have to start over with a new car.

Pros of buying a car

You own the car.

You can modify your car as you please.

You can put as many miles on it without getting hit with a fee (keeping in mind your warranty).

You save money over the long term.

You can sell the car or use it as a trade-in the next time you buy.

Cons of buying a car

Have to deal with the hassle of deciding when it's time for a new one.

And then the hassle of trading it in or selling it.

Limited warranty that can run out before you're done with it.

Pay the full price of the car, so can only get what you can afford.

Higher monthly payments.

How buying a car works

If you choose to buy your car, you basically have 2 options: paying with cash or financing it. If you choose to finance, you have 2 more options: financing through the dealership or taking out a personal loan.

Let's look at both main options individually.

Paying with cash

It's as simple as it sounds: you pay for your car in one lump-sum payment straight to your dealer.

When you pay in cash, you bypass all interest payments, which can save you thousands of dollars. Suddenly making a couple hundred dollar investments every month into your TFSA or high-interest saving account doesn't sound so bad, eh?

Sometimes the dealer will even offer you a cash discount on the car.

Financing the car

If you don't have enough money saved up yet (don't worry - I didn't either), then your other option is to pay for your car through financing.

This can happen directly through your dealer at an interest rate that you negotiate, or through a personal loan from your bank.

Sometimes the interest rate can be better at your bank, so it's always a good idea to shop around for loans before committing to any one dealer.

And watch out for the 0% financing deals ...it's not always what it seems and might end up costing you more money in the long run.

How leasing a car works

Leasing a car means you're renting it for a set amount of time. In the contract they'll list how much it would be to buy the car at the end of the lease, but if you don't want to buy it, you'll have to give it back to the dealer.

There are many factors that go into determining how much your lease will be, the 2 biggest numbers being:

The capitalized cost: The value of the car that you and the dealer agreed on, negotiated down from the MSRP (Manufacturer's Suggested Retail Price).

The residual value: The estimated value of the car at the end of the leasing period, minus the depreciated value.

Basically, you and the dealer decide how much the car is worth today and at the end of the loan. You then sign an agreement to pay for the difference over the course of your lease:

Car's value today - car's value at end of lease = your cost

Both of these values can be negotiated down, so try not to agree to the first number the dealer pitches to you.

The interest on leased cars

You then have to add interest to this cost. But be careful - the interest rate is sometimes expressed as a fraction, known as the money factor.

For example, if they give you a money factor of 0.002, don't assume this means 2% interest. To get the true interest rate, you actually have to times it by 2,400. So a money factor of 0.002 is actually an interest rate of 4.8%:

0.002 x 2,400 = 4.8

Keep this in mind throughout the negotiation so you don't get confused and think you're getting a better deal than you are. That 2.8% difference can mean hundreds of dollars extra by the time your lease is done.

Used car leasing

So what about leasing a used car? Is it still worth it?

You still get most of the same pros and cons as new car leasing, except you don't get to be driving a brand new car and your warranty might not cover the course of your loan.

3 examples of buying vs leasing: Honda Civic vs. Toyota Rav4 vs. Honda Odyssey

Let's look at examples of one of the top sedans, SUVs, and minivans in Canada: a Honda Civic, Toyota RAV4, and Honda Odyssey.

Keep in mind these are using the un-negotiated prices. You're likely to get different numbers at the dealership.

On the surface, it can seem like the leasing option is best since it's the smallest number in each option. But it's important to remember that you won't own the car once you've paid this amount.

For example, say you were looking at leasing the Honda Odyssey and they tell you that at the end of the 60-month lease, your van will be worth $20,000. If you were to buy the car at the end of your lease, this is how the numbers actually look:

If you have to finance the $20,000 purchase price, you're even further behind. And your van will be worth even less once you finish paying it off.

But if you had financed it for 5 years and decide to sell it or trade it in, this is how your numbers look:

You could also just lease another car, but doing this will make your payments go on virtually forever. Once someone who bought the car finished paying it off after 5 years, you'll still be paying. Indefinitely.

Buying a car new vs used

Most personal finance gurus seem to always recommend buying used. But why?

It's because of depreciating value. This is also what people are talking about when they say your car loses thousands of dollars in value as soon as you drive it off the lot.

What is depreciating value?

When buying any consumer item, it instantly loses value and continues to do so the older it gets (unless it's a collectible that you can make a profit on by re-selling in 20 years). This is because it's worth more new than it is used.

There are many different estimates of the rates at which cars lose value. According to this infographic, this is how much a car is worth over the first 5 years of ownership:

If you buy a used car that's 3 years old, you capitalize on the year with the highest loss of value, while also getting the car when its depreciation starts to slow down.

Pros and cons of used and new cars

So let's look at the pros and cons of buying a new car and buying one used.

Pros of buying a used car

Lower upfront cost.

Lower car insurance premiums.

You're the owner of the car.

When buying from a dealer, you usually get a free inspection.

Cons of buying a used car

The car is older, so it's more likely to need repairs.

If you don't buy from a dealer, you'll have to pay for an inspection.

Warranty may have worn out, or it will soon.

Pros of buying a new car

You're getting the newest model.

Car is less likely to need repairs for the first few years.

You're the owner of the car.

Can get a brand new warranty that you can use to its full extent.

Cons of buying a new car

It's much more expensive.

You need to pay for all the starting costs, like mats, freight fees, etc.

Loses value the moment you drive it off the lot.

Getting the most value out of a used car

It's no secret that a new car will be more expensive than a used one, so how can you make sure you get the most out of this extra investment?

There are many things you can do to help your car retain its quality over the years, including:

More on this here: How To Make Your New Car Last Forever

Getting the most value out of a used car

When you're looking at a used car, there are a few important things you'll want to look for.

Make sure there was an inspection done recently, or pay a qualified (and independent) mechanic to do one.

Ask for usage history, including any accidents it may have been in and any repairs or services it has undergone.

Check the odometer to verify how many miles the car has.

Test drive the car to make sure you like the way it drives and how everything works.

It's also helpful to get a value from a site like Carfax, which uses the price of sold cars of the same model in your area. Carfax can also tell you any accidents the car may have been in that the owner may be hiding or the dealer may not know about.

Trading in vs selling

If you have an old car that you're looking to upgrade for your new one, you basically have 2 options if you want to make some money off it - trading in to the dealer, or selling privately.

The pros and the cons

Here are a couple of pros and cons for each option:

Pros of trading in your car

It's generally a faster process.

Buy and sell at one location, in one transaction.

Get some tax savings because the value of the trade goes towards the cost of your car, reducing the amount taxed.

Cons of trading in your car

They're looking for profit, so the amount they offer you has a profit margin in mind.

Pros of selling your car privately

They're just looking for a car, profit isn't a factor.

You have a chance at getting a better price.

Cons of selling your car privately

Generally takes a while to sell unless you have a buyer set up already.

The profit doesn't go towards your new car's price, so you have to pay tax on the full purchase.

How to get the most value for your trade in

Make sure to check how much cars that are the same model and age as yours are selling for.

You can check estimates on sites like AutoTrader. Showing up to the dealership with your research done makes you look more knowledgeable so the dealer is less likely to undersell.

Shop around for different quotes from different dealerships. You can even go to different dealerships of the same car manufacturer in other towns (i.e. check Moncton Honda and Halifax Honda).

Make sure to bring the car in when you're asking for a trade-in estimate. If you ask for one over the phone, they're more likely to give you a higher number in order to get you into the dealership. They might then claim they found something upon inspection that made them reconsider their offered price.

Selling your car online

When you're selling your car privately, you still want to get as much research done as you can. This includes going to the dealership and asking for their quotes, even if you're not intending to go with them.

Use the same sites I mentioned in the previous subsection to check the price the model of your car is going for. You can also list your car on AutoTrader.

Price competitively. Get a mechanic to inspect the car first to save your buyer the trouble, instilling some trust in you.

What about you?

How was your last experience for buying or leasing a car?

Did you trade in? Or buy a used car?

Do you have any tips to share about your experiences?

Let us know in the comments!

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Buying A Car In Canada: The 3 Questions You Need To Answer | How To Save Money

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If you're thinking of buying a car in Canada, there are 3 main questions you should consider before you even think of what type of car you should get. Are you leaning towards actually buying a car or leasing it? Will it be a used car or brand new?

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1. The most interesting thing I learned is that it's really not all leaning one side or the other and either option can be equally viable based on what your looking for. I also learned that many people have different opinions on what they think is the right option.

2. A real life example that's relevant is really going to buy a car. Now that i have read this information I can better make an informed decision on what I want to do.

3.  Really the most important thing i can pass on is to do a bit of research and use the online calculators to help you decide on things.