The purchase of a new vehicle involves several decisions. In the first place, we must find the vehicle that suits us best, then we must decide how to buy it. Financing or leasing is available to us, and to make sure we make the right choice, we must first understand our needs. This is very important because leasing is often the most affordable option, but not necessarily the most advantageous for our particular situation.
That said, for many, leasing is a very good option. Indeed, if you meet the following criteria, it may just be the best option.
You drive less than 24,000 kilometers a year
Perhaps the most important thing to consider about leasing is that it comes with a mileage restriction. Generally, this restriction varies between 16,000 and 24,000 kilometers, and if we exceed that limit, we will have to pay an amount for each additional kilometer. The amount can go up quite quickly, so it’s better to plan ahead before signing the contract.
You have a company or the vehicle is used for work
A tax expert will be able to provide the very best advice here, but overall a leased car offers more tax benefits. It is possible to deduct the full monthly payment if it does not exceed a certain limit, and there are also other advantages in terms of allowable use deductions.
You intend to replace your vehicle in a few years
If you want to change your vehicle in the next three or four years, it is probably wise to opt for a lease. This avoids the depreciation associated with purchased new vehicles that lose a huge percentage of their value when they leave the dealership. When you lease your car, you only have to hand it over at the end of the lease and that’s it.
Thank you to Van Herpt Volvo for their help with this article.