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Tips & Tricks

Leasing or Financing, How to Choose

Published on February 09 2015

When the time comes to buy a new car, new owners will need to choose between financing and leasing (unless of course they are paying the full price of their car immediately).

For many buyers, the implications of each option can be confusing and it is hard to know which purchasing option is better suited to their needs.

Although there are many implications that go into choosing between leasing and financing, here is a quick overview of each purchasing solution.

Mileage restrictions

Leasing your vehicle means that you will have a set number of kilometers that you can drive each year. The number will vary, but it will usually fall between 16,000 and 24,000 kilometers annually with the price being higher for a lease with less mileage restrictions. If you drive a lot during the year, a lease may end up costing you more if you exceed the mileage restrictions.

Tax implications

Although you should check with a tax consultant, there are generally greater tax advantages to leasing. The deduction available on leased vehicles for businesses is more than often higher than on vehicles that are purchased.

Monthly payment

When looking only at the monthly payment, the amount will be lower when you lease. That said, variables like the interest rate, the residual and the resale value of the vehicle must be taken into account to determine the full cost of each option.

For additional information, contact any one of the Mierins Automotive Group's dealerships!

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