Some drivers may not want to make payments for a while, and opt to keep their vehicle longer, past their payment schedule. Others may trade-in an older vehicle well past its prime because they simply need something more reliable and fuel-efficient. But, most trade-in customers are making payments already and are comfortable with that arrangement. If that’s the case, we ask, “why not make them on a new vehicle that comes with new car factory warranty?”

Let’s quickly start by comparing some of the biggest differences between leasing and financing (this is a very simplified explanation, so for more specific details, please consult a Brasso financing expert):

• “FINANCING” is the original, more traditional method of paying for a vehicle over time. With a finance deal, you are paying off 100% of the value of the vehicle (with interest).

• With a “LEASING” deal, you are paying off only about 30% – 50% of the cost of the vehicle (with interest) depending on the term of the lease. This is why leasing payments can often be much lower than financing payments.

When you complete the payment schedule for a financing deal (anywhere from 5 to 8 years on average), you are free and clear.

In a leasing deal, when you complete the payment schedule (3-5 years on average), you still have the remaining balance of the vehicle cost left to pay. This is on average between 30% to 50% which is called residual value. So, you have a number of options. You can start a new FINANCING contract to pay off the remainder, pay out the remainder in one lump payment, or… you can trade it back in and start with an entirely new lease on a new vehicle again.

One of the interesting benefits of leasing is that (in our case) Nissan Canada still technically owns the vehicle while you are making your lease payments. As long as there is a lease, you don’t own the vehicle. This is why some people prefer to rarely finance. They lease for the additional protection it provides.

This again, is grossly oversimplified, but here are the basics regarding purchasing to own a new vehicle:

• One option for purchasing a new vehicle is a “cash” purchase. This option offers peace of mind, no interest, and no monthly payments.

• An affordable option for owning a new vehicle is a FINANCING deal. Financing a vehicle give buyers the flexibility to customize payment options that fit their budgets and lifestyles. You can choose to finance for a longer term, which makes payments less or choose a shorter term. Experienced in-house finance people will shop the best rates based on your credit and help you find the payment plan that’s right for you.

• An alternative to financing is LEASING. Once you complete the leasing payment schedule, you can then refinance the remainder and complete the second payment schedule. But – and this is very important – leasing is not about ownership. Leasing is about cash flow. It’s a non-committal agreement that can be likened to renting an apartment. It offers flexibility, provides comfortable payments and a painless way to transition into a new vehicle every 3-5 years on a lease and on average 5 – 6 years on a finance contract. Business owners like this option because portions of your payments can be a tax write off.

What proves exciting for most leasing customers is that they often do not have to wait until their term is over to move into a new vehicle. Depending on the model and the specific deal, somewhere around year three you can often be in a positive equity position and use that new equity to move into a new vehicle. It can work at the end of the term as well, but why wait?

Unless you are moving into a significantly more expensive vehicle (which, of course, would take a significant down payment to keep your payments the same or similar) there is no advantage to waiting.

If you are making payments on a vehicle now, but would like to explore how to transition into a new vehicle, then ask to consult with one of Brasso’s trade-in and leasing experts. As we have for many of our other clients, we may be able to provide you with a leasing schedule that will allow you to enjoy a brand-new vehicle every 3-5 years!