Should you Lease or Buy a Car in Ancaster?

Should you Lease or Buy a Car in Ancaster?

Posted on January 7, 2022

While climate change is a real phenomenon, for the majority of us in Canada, we need a car to function properly. Public transit is not accessible in all regions of Canada, and the regions it is accessible it does not always run on time.

If you need a newer vehicle, you have two main options available, you can either lease or buy a car in Ancaster.

Our Ancaster auto loans team will cover the merits of each option and let you decide on what makes the most sense.

Leasing 101

When you lease a car, you are agreeing to pay a specific amount of money to have a car for a predetermined amount of time.

At the end of the lease, you will have the option to buy the car at a predetermining amount or return it at no additional cost.

The monthly payments for a car lease are lower than a conventional car loan but there are additional limitations like the total number of kilometers you drive the car.

If you exceed the agreed upon maximum, then you will be charged per kilometer over the limit.

Leases are great if you run a business because you can write off the lease payments as a business expense. When you buy a car, you cannot write off the payment as a taxable expense.

Qualifying to Lease or Buy a Car in Ancaster

Whether you are trying to lease or buy a car in Ancaster, there are a few things you need to bear in mind.

The first thing you will need is a high credit score. Your score should be over 680 to qualify for prime interest rates. You can still get approved for financing, if your score is below 680 but the interest costs are going to be considerably higher.

Along with having a high credit score, you also need to have a reliable income that can be verified.

The pandemic has made the majority of lenders more cautious about giving out car loans, if you are unable to substantiate your income your ability to lease or buy a car are greatly reduced.

Dealing with any credit issues you may have

If you have credit issues, one of the worse things you can do is try and ignore them. You can repair your credit but you need to be proactive and take the initiative.

Request free copies of your credit report from the major credit reporting agencies, and look for mistakes. Credit score is complex, so ask for help by speaking with your local car dealership and find out what steps you need to take to repair your credit.

The reason we suggest going to a car dealership, is their ability to provide you with actionable credit building advice. These dealerships also have access to some of the most competitive financing terms in all of Canada.

Now that you know the difference between leasing and buying a car in Ancaster, you can start going for test drives to determine which option is the best one for you.

For any questions, concerns, or inquiries. Please don’t hesitate to contact us here! 

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