Not Sure Whether to Lease or Finance?
Shopping for a new (or new-to-you) vehicle can already feel daunting with so many incredible options on the market, and then you have to figure out whether to finance or lease. With financing, you’re locked into your loan until you pay it off, after which point you own the vehicle. Meanwhile, leasing is a short-term commitment that generally comes with lower payments and more options once you hit the agreed mileage limit. Curious which option is right for you? Keep reading as we further compare leasing to financing to help you make an informed decision!
Financing vs. Leasing: What’s the Difference?
It’s a common misconception that ‘financing’ and ‘leasing’ are interchangeable terms, but the truth is, they’re very different options. Here are some of the most important short- and long-term pros and cons according to our experts:
| Finance or Lease? | Finance | Lease |
| Monthly Payment | Loan payments are typically higher, as you’re paying off the full price of the vehicle plus taxes and interest. | Lease payments are lower since you’re only paying a portion of the vehicle’s value for the duration that you’re using it. |
| Repairs and Maintenance | You’re likely to spend more on repairs and maintenance, as you’ll own the vehicle for longer, and warranties may expire. | Generally, you spend less on repairs and maintenance since leases cover shorter timeframes. |
| Mileage | Since the vehicle is yours, you can drive as many kilometres as you like without mileage restrictions. | Standard leases offer a set mileage limit (typically 24,000 km per year) with options to include additional kilometres. |
| Depreciation | Depreciation or loss in value can be especially impactful; it isn’t unheard of to end up with negative equity on a vehicle, with your outstanding loan totalling more than the vehicle’s current market worth. | Toyota Financial Services guarantee the vehicle’s value, protecting you from market-driven depreciation or depreciation due to an accident. |
| End of Term | When the finance term ends, you own the vehicle outright and no more payments are required. | At lease end, you can choose to buy the vehicle at Guaranteed Lease End Value, or return it. |
| Vehicle Return | You’re responsible for selling or trading the vehicle once you decide to move on. | The vehicle is returned to the dealership at the end of your lease. |
What are the Benefits of Leasing?
Leasing a vehicle comes with many unique benefits that may feel more accessible or appealing, depending on your lifestyle!
Drive All of the Vehicle, But Only Pay For Part Of It
When you lease a vehicle, you’re effectively only paying for a portion of it rather than committing to the full market value, meaning you also pay less interest and tax. This is ideal for students/drivers who need a vehicle to get to and from work while keeping monthly payments low.
Enjoy All the Latest Bells and Whistles
If you’re someone who can’t resist having access to the latest tech toys, then leasing comes with an attractive amount of freedom. Once your lease is over, simply return the vehicle to the dealership and switch things up with a brand new model! There’s no long-term commitment, unlike with financing or purchasing a vehicle outright.
Warranty Worries Minimized
Your vehicle’s costs don’t stop once the ticket price is paid off; there’s also repairs and long-term regular maintenance to consider, which can add up fast! When you lease, you don’t retain one vehicle long enough to feel the cumulative impact of these expenses. Additionally, you can reduce these costs even further by purchasing a Toyota Extra Care Protection plan to match your term and mileage!
Pay-Off Protection
Unlike finally paying off a lengthy automotive loan, there are no nasty surprises waiting for you at the end of your lease. Toyota Financial Services ensure that depreciation won’t leave you out of pocket on an old or damaged car, and switching things up with a new model is as easy as returning it to the dealership. Alternatively, if you do decide you want to make your lease a long-term vehicle, you only have to pay the agreed-upon, outstanding Lease End Value (plus applicable taxes and fees).
Lease a New Toyota at Heffner Toyota in Kitchener, ON
De-stress your driving journey by leasing your next vehicle! Curious to learn more? Connect with our finance experts today to discuss your new lease and select from our wide range of Toyota cars, SUVs, and trucks!