Financing vs. Leasing in Calgary, AB
When you’re considering your next new vehicle, you’ll reach the point where you need to choose between financing or leasing your new vehicle. The choice between financing and leasing a new car, truck, or SUV may seem daunting to the uninformed, and the best answer truly depends on your personal situation and preferences. Generally speaking, leasing offers lower monthly payments, plus the benefit of a new car every 2-3 years, compared to financing. However, financing offers the benefit of total ownership. For a thorough breakdown, book your financing consultation appointment with Honda West’s expert financial advisors.
Why Choose Financing?
The main benefit of financing your new vehicle is having total ownership of your car, and being payment-free after your term has been paid off. Here are some points that you should know about financing your vehicle:
- Pros:
- Complete vehicle ownership
- No payments after you’ve paid off the loan
- Can drive for long-term
- Freedom to customize
- Cons:
- Responsible for repair costs after warranty expires
- Higher monthly payments
Why Choose Leasing?
Leasing offers advantages such as lower monthly payments, driving a new vehicle every few years, and having repairs covered under warranty. However, you are limited to the kilometres you can drive over the term, as well as you don’t own the vehicle after your term expires. Here are some points to know about leasing:
- Pros:
- Drive a new car every 2-3 years
- Lower monthly payments
- Always under warranty
- Cons:
- Won’t own car at end of term
- Limited to kilometres you can put on it
- Must properly maintain
Financing vs. Leasing: Bad Credit
Bad credit can affect which option is best for you. Typically, buyers with a lower credit rating can still secure financing but will be subject to higher rates and monthly payments. When it comes to leasing, typically drivers may not be approved if they have lower credit scores, as lenders cannot retain the vehicle as collateral, since the driver does not “own” the vehicle. Furthermore, when financing with a lower credit score, as long as you make your payments on schedule, you’ll actually improve your credit rating over the course of the loan. So for prospective buyers with lower credit scores, stick to financing for more consistent approval, as well as improving your own credit rating. Talk to our financial advisors here at Honda West for more details.
Does Leasing or Financing Affect Insurance?
No matter which choice you make, your insurance will be unaffected by either financing or leasing your new vehicle. The factors that affect your insurance include driving history, the type of vehicle you drive, where you drive, and how long you’ve been driving. With your insurance, the name of the leasing company or financer will be listed on the insurance policy. In the event of an accident and write-off, insurance will pay the leasing company or financer first, and if your vehicle is worth more than what you owe, you will receive the outstanding amount.
For all your new vehicle financing or leasing questions, get in touch with our expert team here at Honda West’s Financing Department, helping you secure the right financing or leasing terms for your new Honda vehicle. Book your appointment today, and come visit our Calgary, Alberta location, serving everywhere from Airdrie to Okotoks. For the best new Honda inventory in Calgary, visit Honda West today.