Leasing Vs. Financing in Calgary, Alberta

At Jack Carter Chev GMC, we understand that purchasing a new vehicle can be quite the undertaking, full of difficult decisions. Perhaps the most difficult is the decision whether to lease or finance your new vehicle. Whether you’ve got poor credit, perfect credit, or something in-between, we’ll look at the differences between the two as well as weigh the pros and cons of each. 

What is vehicle financing?

Financing a vehicle simply means you’re taking out a loan to purchase your vehicle over a set period of time. You’ll make monthly payments over that term, and at the end of which you will own your vehicle outright—similar to taking out a mortgage on a house.

What is a vehicle lease?

If financing is like buying a home through a mortgage, then leasing is like renting a home or an apartment. You simply pay a monthly fee to use the vehicle over a set period of time. Now, unlike renting, the benefit to leasing is you’ll also have the option to buy the vehicle at the end of your lease.

The Pros & Cons of Leasing & Financing

Both options are viable and, depending on your needs as well as what you look for in a vehicle, the decision of whether to lease or finance a vehicle is highly dependent on a number of factors. Your best bet, if you’re unsure, is to come visit a member of the Finance team at Jack Carter, but we’ve also put together a few of the pros and cons to each choice below.

Leasing Pros

  • Leasing a vehicle allows you to drive a newer model every few years
  • This means access to newer safety features and technology
  • It also results in a lower monthly payment
  • The vehicle will always be under warranty
  • Perfect for those with a stable lifestyle and budget
  • A great option if you have prime or super prime credit

Leasing Cons

  • Your payments don’t contribute to ownership
  • You can get charged early termination fees
  • There are often mileage caps on leased vehicles
  • You aren’t able to modify the vehicle

Financing Pros

  • Financing helps you build equity
  • You’ll own the vehicle when you’re done
  • You’re allowed to customize your vehicle
  • A great way to rebuild poor credit
  • Your best option if you have subprime credit
  • You can sell your vehicle 
  • Great if you drive a lot

Financing Cons

  • You’ll pay higher monthly payments
  • You’ll be on the hook for repairs when the vehicle isn’t under warranty
  • You have to choose wisely as you can’t switch vehicles as easily

How Your Credit Impacts Your Choice

Your credit will have a major impact on your options, when it comes to leasing or financing a vehicle. If your credit is on the lower side, you’ll generally be faced with higher rates whether you lease or finance. However, financing a vehicle will give you a greater opportunity to improve your credit over time (with regular, on time payments). Conversely, while a lease may typically offer a lower monthly payment, if your credit is subprime and you’re considered a lending risk you may not qualify for a lease (or the payments may not actually be that much lower). 

An auto loan, however, is what’s considered a secured loan. This means that there is collateral (in this case, the vehicle) attached to the loan. This means your vehicle could be repossessed, making it easier to get a loan with poor credit. Of course, if you have prime or super prime credit, you’ll have an easier time securing a better rate no matter the option you choose.

Here at Jack Carter Chevrolet GMC Buick, we offer an in-house finance team that’s ready to get you approved regardless of your credit history. Add this to our extensive selection of new and pre-owned vehicles, and it’s no surprise that we’re Calgary’s premier destination when it comes to leasing or financing a vehicle. The above are just suggestions as to whether you should lease or loan a vehicle; if you’re at all unsure, simply visit us at Jack Carter Chev GMC and an experienced member of our Finance team will be happy to discuss your options with you.