# data[].attributes.body
Hi there, thank you for visiting my padlet. Today we will be learning about the pros and cons of buying and leasing

# data[].attributes.body
This picture is a chart comparing buying and leasing a car. This chart includes the money, the bills, the commitment, and the dollars and cents when buying vs leasing. This gives you a quick look at what fits your budget.

# data[].attributes.body
This picture talks about the pros of buying and leasing. Gives a list of pros like how many vehicles you could have in a sixty month payment period, mile allowance per year, even maintenance agreements.

# data[].attributes.headline
Video #1 - Leasing vs. buying: what is best for you?

# data[].attributes.subject
Video #1 - Leasing vs. buying: what is best for you?

# data[].attributes.body
In this video is gives you pros about buying and leasing. Here are the pros they gave in this video:
·Leasing can mean lower monthly payments

·Buying means monthly payments will eventually end

·Buying your car through financing means that a consumer can calculate not only the cost per month, but also the exact point when their monthly payments will end

·Leasing can easily be written off as a business expense

·Buying a vehicle requires no restrictions on annual distances or damages

·Lease agreements have a variety of rules of how much you can drive a car per year, what kind of wear and tear is acceptable without additional charges.

·Leasing allows you to drive a newer model

·Leasing is a way for you to continually upgrade your vehicle for the recently released model.

·There is equity in a vehicle that is purchased

# data[].attributes.attachment_link.title
Leasing vs Buying:   What is Best For You? - Canada Drives

# data[].attributes.headline
Video #3 - When leasing might come out better than buying

# data[].attributes.subject
Video #3 - When leasing might come out better than buying

# data[].attributes.body
This video is a follow up of video number 2, asking when in this scenario would it be cheaper to lease. Now if you watched video number two, it showed you what you would owe if you were to buy or lease a car but what also happens if you were to keep it or give it up at the end of the payments. In the second video, under the give it up scenario, the gentleman did an estimate on the expected resale price of the car, he estimated it at $12,000. Now in that scenario, that would be selling it to a buyer, if you were to sell it back to the dealership, the expected resale price would be much lower. In this case, leasing would be the cheaper option if you were to give up the car after the payments were finished.

# data[].attributes.attachment_link.readable_text
I have my friend Matt here. He just saw the video I made upon leasing versus buying the subcompact car. You had a question. Yes, Sal. So I see from the video that it makes sense to buy the car in both those scenarios you went through. But does it ever make sense to lease a car? Yeah, I was actually thinking about that myself when I went through it. Okay, under what scenarios? In that video I kinda threw out the idea that, oh, well, maybe there are reasons from a tax point of view, if you're a small business owner or you're a salesman and a car is essential for your business, you might be able to deduct the lease. That's a subject for another video, but let's say you didn't have that. If you're just, it's not a business expense in some way, one thing that you could think about, if you're gonna keep the car, it's hard for me to imagine scenarios where buying doesn't win over leasing, but maybe there are some that people could think of. If you're going to give up the car, if you think you're going to give up the car on a regular basis, in that video we had the buying still came out better. But a big part of the reason why buying came out better was based on this assumption of what the resale value of the car actually is. I assumed here $12,000, and actually I did try to estimate for the subcompact car based on its historic depreciation, but this $12,000 was based on the private market. And to sell something on the private market you gotta post something on the internet, people come to you, you have to do some work in order to sell your car. If you just wanted to sell it to a dealer, they're not gonna give you this $12,000. They'll give you something less. They'll maybe give you, say, they'll maybe give you $10,500, actually seemed like the likely price. So if we make this $10,000, if we make this $10,500, then the giving up the car scenario is gonna be $18,740 minus $10,500. It gets us to $8,240. $8,240. So in this scenario, if we make these different assumptions where you just trade it into the dealer and you don't get as much for it, but you just did it because you wanted an easy transaction, it actually comes out that hey, maybe for these numbers, not always, but for these numbers, that the lease could actually make a little bit more sense. Yeah, absolutely. I can see where that, in this case, it would make sense to lease versus buy. Cool.

# data[].attributes.attachment_link.title
When leasing might come out better than buying (video) | Khan Academy

# data[].attributes.attachment_link.description
I have my friend Matt here. He just saw the video I made upon leasing versus buying the subcompact car. You had a question. Yes, Sal. So I see from the video that it makes sense to buy the car in both those scenarios you went through.

# data[].attributes.body
This video shows you with visuals, if you were to want a new car, which option would be more beneficial. This video explains to you if you were to want a car that costs $17,700, it shows you what you would be paying in the end if you were to buy it or lease it. This video also puts this into two perspectives, if you were to keep the car in the end or if you wanted to give up the car after the lease is over. In the end, buying the car in both scenarios was the cheaper option. Saving around $1,000-$2,000.

# data[].attributes.attachment_link.description
How does buying a new car compare to leasing one?

# data[].attributes.headline
Website #1 - Should I buy out my lease? 

# data[].attributes.subject
Website #1 - Should I buy out my lease? 

# data[].attributes.body
This Canadian website helps you determine whether or not you should buy out your lease or return it to the dealer in the months before the lease period ends. This website gives you a lot of useful information regarding leasing. It talks about what a lease is and how it works, it talks about what residual value is and how it is calculated. It gives you information about getting out of a lease in specific situations. It also gives you the pros and cons of buying out a lease. This website is a great help for people who need help deciding whether a lease buyout is right for them.

# data[].attributes.attachment_link.provider_name
Canadian Vehicle History Reports - Carfax Canada

# data[].attributes.attachment_link.readable_text
The end of your car lease can come before you know it, so it's best to determine whether to buy out the car or return it to the dealer in the months before the lease period ends. Although you may love the car you're leasing, it's not always easy to decide whether to buy it once the lease is up. Depending on the vehicle's condition, mileage and your contract with the dealership, choosing a lease buyout may or may not be a good investment.

Knowing your lease residual (and what this term means) will help you decide whether a lease buyout is right for you.

What is a lease and how does it work?

Although many Canadians prefer to purchase their cars, around one in five cars in Canada are leased. A vehicle lease is an agreement in which a dealership gives a customer temporary ownership of a car for a pre-determined amount of time and money. If a person fails to meet the conditions stated in the lease contract, they can face additional charges when the lease is up. People often choose to lease vehicles for business, personal use or as sort of a long-term test drive to help them find the perfect vehicle for their family.

When you lease a vehicle, you are responsible to maintain it and keep it within a set mileage allowance. Once your lease is up, you can choose to return the vehicle or purchase it from the dealership. Purchasing a leased vehicle is known as a lease buyout.

What is residual value?

The residual value of a leased vehicle is an estimate of how much the car is worth once the lease contract is up. The residual value helps determine what your monthly lease payment will be.

The lease residual is also the price you will pay if you decide to buy the vehicle once your lease is up. This is something you can negotiate as part of your lease contract.

How is lease residual calculated?

The lease residual is based on a certain percentage of the Manufacturer's Suggested Retail Price (MSRP). For instance, if your leased vehicle has an MSRP of $30,000 and a residual lease value of 50% for a 36-month lease, the lease residual is $15,000.

Can I get out of a lease?

If you're looking to get out of your lease before the arranged period is up, you have a few options:

Transfer your lease: Transferring a lease means handing over the lease agreement to another party. When you transfer a vehicle lease, the new party becomes responsible for the contract requirements, including the payments and vehicle's condition.

Buy out your lease early: Most dealerships provide the option to buy out your lease early. To do so, you'll have to pay the residual value of the vehicle and the outstanding balance on the lease. You may also be required to pay applicable taxes.

Get a new car lease: If you have good credit, you may be able to end an existing lease and start a new one. However, dealerships will take the remaining balance of the lease, the residual value of the vehicle and taxes into consideration.

There are companies in Canada, like LeaseBusters, that are dedicated to transferring leases at affordable prices. There are also residual value car lease calculator tools available online.

What are the pros of buying out a lease?

People choose to buy out their vehicle lease for many reasons, including:

Not only will you have a vehicle you're already comfortable with, but you'll have a dealership to return to with any concerns, including mechanical issues

Buying your leased vehicle may cost less as you've already paid for the vehicle during the highest period of depreciation

What are the cons of buying out a lease?

Completing a lease buyout may not be in your best interest if:

Your dealership requires a lease purchase fee (if included in the contract)

A leased vehicle may end up costing more than buying a new model

As your end-of-lease period approaches, make sure you know the pros and cons of buying out your leased vehicle. If you're unsure of your lease residual or the parameters of a buyout in your contract, set up an appointment with your dealer.

When it comes time to decide if you should buy out your lease, get an idea of the vehicle's value with the free CARFAX Canada Value Range tool.

# data[].attributes.attachment_link.title
Determining Residual Value - Should I Buy Out My Lease? | Canadian Vehicle History Reports - Carfax Canada

# data[].attributes.attachment_link.description
The end of your car lease can come before you know it, so it's best to determine whether to buy out the car or return it to the dealer in the months before the lease period ends. Although you may love the car you're leasing, it's not always easy to decide whether to buy it once the lease is up.

# data[].attributes.headline
Website #2 - 3 numbers you should check before deciding whether to lease or buy a car

# data[].attributes.subject
Website #2 - 3 numbers you should check before deciding whether to lease or buy a car

# data[].attributes.body
This website gives you valuable information about whether to buy or lease a car. It gives you three numbers you need to look at which will then help you decided whether it is better for you to buy a car or lease a car. The first number they say you should consider is the equity you give up by opting for lower lease payments. This one includes the monthly payments you will be paying which you should consider depending on how much you’re willing to pay per month. The second number is your yearly mileage. This section talks about how when leasing, you are only allowed to drive a certain number of kilometres or you will have to pay more if you exceed the limit. The last number is your tax deductions, this section talks about how the only way leasing could yield better tax deductions is if your vehicle is rather expensive (more than $40,000).

# data[].attributes.attachment_link.readable_text
It's finally spring - the time when birds start chirping, ice melts off streets, and many Canadians begin to feel the irresistible urge to get a new car.

So here's the eternal question: Does it make sense to lease your vehicle instead of buying it?

From a financial point of view, there's a quick and easy answer: Buy.
WATCH: New cars: buy or lease?
The best approach from a financial perspective is to purchase a slightly used vehicle, said Jason Heath, a certified financial planner and managing director at Objective Financial Partners.

"The sweet spot is a car that's one to two years old," he added.

That's because cars depreciate quickly in their first few years off the lot, but the depreciation curve tends to flatten out after that.

WATCH: Five tips you need to know when buying a used car

Buy a relatively new used car and you can save a bundle compared to purchasing a new model of the same make and also sell the car for close to what you paid for it a few years later, should you wish to, according to blogger and car enthusiast Freddy "Tavarish" Hernandez.

But what if you really like new cars?

Buying is still the better way to go in most cases, according to Heath.
WATCH: How to save money when buying a car

Still, as far as financial sins go, leasing instead of buying your vehicle generally falls in the category of small indulgences for Heath. It's in there with things like having a steak dinner: There are cheaper, financially wiser options, but it's unlikely you'll go bankrupt for it. Plus, sometimes you gotta live.

So how do you weigh the lifestyle pros against the financial cons of leasing?
READ MORE: Why this is going to be the most expensive year for gasoline since 2014
There are three sets of numbers you should consider carefully before you put your John Hancock on a car lease:

The equity you give up by opting for lower lease payments

Besides the fact that you can get a brand new ride every few years, what makes leasing so attractive is that your monthly payments are usually much lower than if you were buying the same vehicle.

That's because when you lease you're only paying for the amount that the car will depreciate for the duration of the term of the lease.

Say, for example, that you're leasing a $30,000 car for three years. Assuming the vehicle's residual value at the end of the term is $17,000 and your interest rate is 1.9 per cent with no down payment, you're looking at about $450 in monthly payments. If you were to buy that car and pay it off in three years with zero per cent financing, you'd be looking at a whopping $940 per month in Ontario (including HST), according to the vehicle calculator provided by the Office of Consumer Affairs.

At the end of the lease, though, you're left with nothing. If you had bought the car, you'd have a vehicle you could sell for $17,000 or keep driving for, say, another seven years at least, with little more than maintenance costs to worry about.
READ MORE: Considering a long-term car loan? Think twice, say experts
Your yearly mileage

There's another set of calculations you should do before opting for a lease, said Heath: Figure out how many kilometres you're likely to drive in a year.

The lease rate you'll be quoted is generally based on a fairly low mileage and going over it will cost you, noted Heath.

Twenty-five thousand kilometres per year is a common limit in Canada. But Heath said he easily drives over 30,000 kilometres a year, even though he often works from home.

Even a short commute could push you above your mileage cap.

You should also be careful about getting dinged for little repairs at the end of the lease, said Heath.

"Car companies are usually pretty particular about these things," he noted.
READ MORE: Digital odometer tampering 'being done more often than not': expert
Your tax deductions (if you're self-employed)

One common misunderstanding is that leasing is a better deal than buying, if you're self-employed and can claim vehicle expenses on your tax return, noted Heath.

Leasing could yield better tax deductions than owning, but only if your vehicle is rather expensive - say more than $40,000 - cautioned Heath.

"There are maximum amounts you can depreciate on the purchase of a car and the amounts that you can deduct if it is leased is often more favourable with a more expensive car," said Heath.

For those with average budgets, though, "it probably won't make a huge difference whether you buy or lease," he added.
READ MORE: Self-employed? Here are 6 steps to get your taxes right

# data[].attributes.attachment_link.title
3 numbers you should check before deciding whether to lease or buy a car

# data[].attributes.attachment_link.description
It's finally spring - the time when birds start chirping, ice melts off streets, and many Canadians begin to feel the irresistible urge to get a new car. So here's the eternal question: Does it make sense to lease your vehicle instead of buying it?

# data[].attributes.headline
Website #3 - Lease or buy a car: What's the better option?

# data[].attributes.subject
Website #3 - Lease or buy a car: What's the better option?

# data[].attributes.body
This website talks about the better options when wanting to purchase a new car. It broke down a scenario where someone wants to buy a new car and what they would be paying if they were to lease it and if they were to buy it. It talks about why the monthly payments are lower when leasing compared to buying. It gives you a step by step math equation that will compare the payments of buying a new car and leasing the same car.

# data[].attributes.attachment_link.readable_text
You're shopping for a new car. You know which model you want. But how should you pay for it? Financing it with a loan may require a $600 monthly payment, whereas that very same vehicle could be leased for perhaps $350 a month. (Of course, some people will find a way to justify using that $600 a month to lease a fancier car.)

It's one of those perennial questions, and everyone seems to have an opinion. The big dangling carrot of leasing is clear: cash flow. The problem, of course, is that if you always lease, you will always have a monthly payment.

Let's break down the difference between a purchase loan and a lease to the fundamentals.

If you buy a car outright and you don't have the cash to pay for it, you take out a loan. Let's assume no down payment. If the car sells for $30,000, you'll need to take out a loan for $30,000, and you may be charged interest for borrowing that money.

With a lease, instead of borrowing the full purchase price of the car, you are only borrowing the amount the car will depreciate over the term of the lease. With a three-year lease, and the expected market value of $15,000 in three years based on regular wear and tear (known as the "residual value"), then you only have to finance the difference between the purchase price and the residual value. Financing $15,000 is going to have a lower monthly payment than financing $30,000, even with a shorter lease term. This is the basic reason lease payments are lower than loan payments.

So with leasing, you have peace of mind. You also have the upgrade factor: Since leases are generally between two and four years, the vehicles are almost always going to be fully covered by warranties and driving them should be problem-free. These are the best years of a car's life. Once the lease is up, you get to trade in your car for the latest model. You can keep up with the Joneses.

On the other hand, if you took out a five-year loan to purchase the car outright, your monthly payments would stop after five years. It would be only a matter of time before the break-even point was reached.

Of course, you have to consider more than just the difference between monthly payment amounts and length of payments. Over longer periods of time, there will be major maintenance requirements that need to be calculated into the equation. But, for the most part, a person who drives responsibly and pays attention to routine maintenance is going to come out ahead if they buy.

There is no law that says you have to drive a bought car into the ground. If you want to upgrade, you have the option of selling the car any time. After a few years, there should be equity in the car over and above the balance of the loan, which can be used toward a down payment on the next vehicle.

So, as usual, there is a tradeoff: With leasing, you will pay a premium over your lifetime in exchange for a lower monthly payment and very few concerns about reliability. With an outright purchase, you're going to come out ahead if you can commit to proper maintenance and resist the urge to constantly upgrade.

For those who think solely in terms of monthly payments, a $0 monthly payment at least some of the time is pretty attractive.
DO THE MATH
Here's a comparison of leasing and buying the same car for 10 years (in pretax dollars).

Vehicle list price MSRP: $34,000

Lease details: 36 months, 24,000 km annual allowance, $0 down offered at 1.9-per-cent financing and some incentives.

Lease payment: about $520 a month for 10 years, assuming continual roll over to new car at term expiry.

Total financing cost over 10 years: $62,400

Loan financing details: 60 months, $0 down, offered at 0-per-cent financing, miscellaneous incentives.

Loan payment: about $600 a month for five years.

Total financing cost: $36,000

Timing belt, water pump, tensioner in fifth year: $1,500

Replace brake rotors and pads every three years: $1,000 x 3 = $3,000

Miscellaneous parts and labour over 10 years: $10,000

Total financing, maintenance and repairs: $50,500

Potential savings in this example: $11,900 plus the value of owned car at 10 years.

Editor's note: A previous version of this story incorrectly said that loan payments were $567 a month for five years and that the total amount for financing, maintenance and repairs was $24,500. The numbers have since been corrected.

Preet Banerjee is a senior vice-president with Pro-Financial Asset Management. His website is wheredoesallmymoneygo.com

# data[].attributes.attachment_link.keywords[]
auto car buying versus vs v leasing vehicle dealership deals loan financing personal finance budget household spending canada transportation

# data[].attributes.attachment_link.title
Lease or buy a car: What's the better option?

# data[].attributes.attachment_link.description
You're shopping for a new car. You know which model you want. But how should you pay for it? Financing it with a loan may require a $600 monthly payment, whereas that very same vehicle could be leased for perhaps $350 a month.

# data[].attributes.headline
Website #4 - Leasing vs. buying: What is best for you?

# data[].attributes.subject
Website #4 - Leasing vs. buying: What is best for you?

# data[].attributes.body
Did you know that according to Statistics Canada, the average Canadian puts 20 per cent of their income towards an auto loan every year? This website talks about how leasing a vehicle work and how financing a vehicle works. It talks about how leasing is different from financing. It even mentions the penalties of leasing and financing. Leasing is a very popular alternative to financing in Canada.

# data[].attributes.attachment_link.readable_text
Get pre-approved for a new car or sell your car directly to Canada Drives.

Shop For a Car With Confidence

Sell Your Car Directly to Canada Drives

What type of vehicle are you looking for?

Canadians Love Canada Drives

Melanie North York, Ontario

Kenneth Alliston, Ontario

Keith Kelowna, British Columbia

See More Happy Customers

The Easiest Way to Buy or Sell a Car

# data[].attributes.attachment_link.title
The Easiest Way to Buy or Sell a Car | Canada Drives

# data[].attributes.attachment_link.description
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.