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Leasing vs Financing

Leasing vs Financing

Cars are some of the most expensive things we’ll buy in our lifetimes, perhaps only second to housing. So, you must be very careful when choosing how to pay for your new vehicle. It’s crucial to understand the advantages and disadvantages when you lease or finance a car before making up your mind. 

Financing Explained

If you don’t have cash upfront to buy a car, don’t worry -- you definitely aren’t alone. The best car dealerships work with various lenders that offer flexible terms and are ready to adapt to individual demands and budgetary conditions. It means you can finance Mazda vehicles with tailor-made agreements.

The financing agreement involves monthly payments for a fixed period. Monthly payments must be made in a timely and complete manner, and the vehicle will be yours only after the end of the loan term. Financing agreements also involve a down payment of part of the vehicle’s value at the start. You can also use another vehicle as a trade-in, lowering your overall cost. 

Pros and Cons

The best thing about financing is that you’re paying for something that will actually be yours later. However, there are some downsides, too. Interest rates and fees will increase if payments are delayed or missed. The dealership can even take back your vehicle if you fail to keep up with your monthly payments. Some financing agreements are long, resulting in a much higher final payment than the vehicle’s actual value.

Leasing Explained

Instead of financing a vehicle, you can opt for a leasing agreement. You’ll still have monthly payments, but you’ll never be the owner of a leased car. It still belongs to the dealership, for which you have to arrange the terms of the agreement. 

If you want to lease Mazda vehicles, for instance, the dealership may impose limits of use, such as maximum mileage allowed per year and maximum permitted mileage during the lease term. You’re also responsible for the vehicle’s maintenance during the leasing period. Penalties may apply if you exceed those limits or fail to meet your maintenance responsibilities.

Pros and Cons

Leasing agreements typically last between two and four years. After this period, you must return the vehicle to the dealership. Although paying for something that’s not yours might sound dismaying, it’s a handy solution for those who like to change vehicles regularly. Besides, a leasing agreement usually involves lower monthly payments and requires smaller down payments.

However, it’s not the same thing as owning a vehicle. Yearly mileage limits typically range between 16,000km and 24,140km. Penalties also apply if you return the vehicle with wear and tear above the levels agreed upon in the leasing contract. You won’t be allowed to customize your vehicle either.

Choose Your Next Vehicle Today

You’ll find the best leasing and financing opportunities at Revolution Mazda in Grande Prairie, AB. Explore our inventory to learn all about our offers and conditions.