[Infographic]: Buy vs Lease a Car

Debates over buying versus leasing cars can get pretty heated! On the one hand, many consumers love the idea of owning an asset outright; while it seems just as many others are drawn to driving away a brand new model every few years.

If you’re pursing auto sales training, be prepared to discuss the merits of buying versus leasing both in class and out on the lot once you’ve landed your first job.

A good auto sales and leasing program will teach you how to assess each consumer’s wants, needs, driving habits, and budget – which will ultimately determine whether purchasing or “borrowing” works best for them.

So while it’s tough to generalize, there are some typical pros and cons when it comes to buying or leasing. Check out our handy infographic for a run-down of the basics.

ATC-TO-lease-vs-buying

Ownership

Buy: Each payment builds equity in your car; ultimately you will own it

Lease: Your car is owned by the leasing company; you pay a monthly fee to “borrow” it

Financing

Buy: Your loan will have to cover the full cost of the car

Lease: Your loan need only cover the expected depreciation of the car

Monthly Costs & Financing Term

Buy: Average is $549/month, for a term of 72 months

Lease: 30-60% lower than loan payments, for an average term of 36 months

Modifications

Buy: You are free to modify or customize the vehicle in any way you like

Lease: You must return the car, exactly as is, at the end of your lease

Mileage

Buy: The car is yours; you can rack up as many miles as you want

Lease: You’ll be limited to an average of 13,000 miles per year; overage results in extra charges (approx.

13 cents per mile)

Excessive Wear & Tear

Buy: It lowers the car’s re-sale or trade-in value, but you’re only held accountable to yourself

Lease: You’ll have to pay the leasing company a cash penalty for “above normal” wear and tear

Turnover

Buy: You’ll have to pay off your existing car before you purchase a new one

Lease: Every 3-4 years you can trade in your car for a brand new model

Popularity

Buy: Nearly 70% of Canadians choose to buy cars using 6-8 year term loans

Lease: About 20% of Canadians lease cars; more than 50% buy their car at the end of the lease

 

Sources:

http://www.theglobeandmail.com/globe-investor/personal-finance/lease-or-buy-a-car-whats-the-better-option/article565403/

http://www.marketwatch.com/tools/carleaseorbuy

http://www.consumerreports.org/cro/2012/12/buying-vs-leasing-basics/index.htm

https://www.carbuyingtips.com/glossary.htm

http://globalnews.ca/news/1133080/the-rise-of-the-8-year-car-loan/

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/canadians-rev-up-spending-with-car-loans/article19813098/

http://www.theglobeandmail.com/globe-drive/news/industry-news/lease-or-finance-a-new-car-we-break-down-the-pros-and-cons-of-each/article23112792/


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Categories: ATC News, Infographic, Toronto
Tags: auto sales and leasing program, Auto sales training

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