Is Leasing Right for You?
Leasing is renting a car long-term with the option to buy. It's not inherently good or bad - it's a tool.
The Three Numbers
- Capitalized cost: negotiated price, just like buying
- Residual value: predicted value at lease-end, set by leasing company
- Money factor: lease equivalent of interest rate (multiply by 2,400 for APR)
Who Should Lease
- You want a new car every 2-3 years
- You drive under 20,000 km/year
- You want lower payments than buying
- You don't want maintenance headaches
Who Should Buy
- You'll keep the car 5+ years
- You drive 25,000+ km/year
- You want to build equity
- You modify or customize cars
Hidden Pitfalls
- Kilometre overages: typically charged per excess km
- Wear and tear: stained seats, chipped paint add up
- Disposition fee: $300-500 just to return the car
- Early termination: remaining payments plus fees