Leasing vs Financing in Toronto, ON

Financial Options for Buying a Vehicle at Midtown Honda

Leasing and financing a vehicle are the two financial options you have to choose from when purchasing a vehicle. With pros and cons to both, such as interest rate deals for financing and lower payments for leasing, it’s best to weigh your current financial situation as well as which appeals to you the most before looking at a potential vehicle. That way, you can be all-the-more ready to drive right off the lot with a vehicle once you start the purchasing process.

Read on as our financing team at Midtown Honda covers the differences between financing and leasing, including the benefits to both options, below!

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Financing a Vehicle

When you finance a vehicle, you borrow money from a third party (usually a bank, credit union, or the dealership itself) to buy the vehicle outright. Now with ownership of the vehicle, you pay off the loan to the third party over a set term (commonly 3-8 years) at payment increments that are also agreed upon ahead of time. Once the term is over and you’ve paid off the loan along with the interest rate, you can choose what you want to do with your vehicle. You can also trade in or sell your vehicle before the financing term is over, and use part of the funds from doing so to pay off the rest of your loan. Because you own the vehicle from the get-go, you have complete freedom when it comes to how you use it or what you do with it. However, it’s best to note that vehicles with higher mileage usually get a lower market value when you try to sell or trade them in when compared with the same vehicle that sports a lower mileage.

Leasing a Vehicle

Leasing a vehicle is easier to think of as borrowing the vehicle for an agreed-upon length of time. When you sign a leasing agreement, you pay the dealership to use the vehicle for the term (commonly 2-4 years). Once you reach the end of the term, you choose between either buying the vehicle outright (at a lower cost, called the vehicle’s depreciation) or returning the vehicle to the dealership. Because you are only borrowing the vehicle, there is typically a set mileage limit outlined in the leasing agreement. This means you can only drive the vehicle a certain amount (to or below the mileage limit) before the end of the leasing term.

Financing & Leasing Benefits

Financing
- You own the vehicle
- You can get more interest rate deals on financing options
- You can build your credit score by getting your payments in on time
Leasing
- Your payments are typically lower
- You can upgrade easier to a newer vehicle every few years
- Your warranty typically covers the entire lease term

Finance or Lease a Vehicle at Midtown Honda in Toronto, ON

If you’re interested in financing a new or used vehicle, our financing team at Midtown Honda can help! With our expert staff, you can find the vehicle that best suits your driving needs while also getting the financial option that best meets your budget and preferences. Feel free to contact us if you have any questions about what financial options are available to you, drop by our dealership in Toronto, ON, to see our vehicles in person, and use the secure form below to apply for credit today!