Lease Or Buy?

There are a lot of decisions that need to be made when buying a new vehicle. Once you have finally settled on the new Ford car, truck, or sport utility vehicle of your dreams, you still have a few decisions to make about how you want to pay for it! Chief among them is choosing between leasing for financing your new Ford or Lincoln.

Our team of experienced financial services experts will be more than happy to help you make this informed decision. For starters, a few questions need to be answered.

• How long do you plan on keeping your vehicle?
• How many kilometers do you drive per year approximately?
• Is your vehicle a tax deduction for employment or business purposes?

These are just some of the important questions that help determine whether a lease or a purchase is the way to go.

When we look at some of the advantages and disadvantages of buying and leasing, we see why these questions are important. Have a look.

When you lease a new vehicle, you are effectively paying a portion of its total amount. It is therefore to be expected that the monthly payment will be less than when you are financing the vehicle. The difference is usually a few hundred dollars for the same contract terms.

A new vehicle will always lose a portion of its value quite rapidly after it is purchased. When the vehicle is leased, it isn't yours until you decide to buy it back at the end of the lease. That said, there is no obligation to do so with a traditional lease, and so you have the opportunity to witness the depreciation and if it is too high, you don't suffer from it. You simply give the vehicle back. For consumers who like to replace their vehicle after three or four years, this is a considerable advantage.

There are more deductions available when the vehicle is leased for business purposes compared to a vehicle that is financed.

Leased vehicles usually have restrictions when it comes to how many kilometers you can drive annually. The restriction will vary, but are usually between 16,000 and 24,000 kilometers. The point here is that there are no such restrictions when you finance your vehicle. So, if you drive your vehicle a lot during the year and regularly go over 25,000 kilometers, financing your vehicle is usually the best option from a financial stand point.

Like buying a house instead of renting an apartment, you will usually pay more when you finance your vehicle, but at the end of your financing contract you own the vehicle. You can therefore either sell it and get back a portion of the extra amount you paid, or keep it for a few more years without any monthly payments. If you plan to keep your vehicle longer than five years, it is usually more beneficial to finance it from the start than lease it first and then buy it back.