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Bad Credit Car Loans
Bad Credit Auto Loans
No Credit Car Loans
No Credit Check Car Loans
Used Accords in bad credit car loans
Used Odysseys in bad credit car loans
Used CRVs in bad credit car loans
Used Pilots in bad credit car loans
Even No Credit Check Car Loans in bad credit car loans area
At Used Honda Toronto we offer financing in bad credit car loans area
And of course many quality used Hondas in bad credit car loans area
Lease Versus Finance A New Vehicle.
Lease – sometimes been referred to as a “long term rental”, it is usually the cheaper way to go in terms of a lower monthly payment, better cash flow, and it is especially beneficial to business owners because of the tax benefits. Lease in general is slightly more expensive compare to financing, only if you decide to purchase the vehicle out right. Typically lease payments are before taxes, that include monthly payment, residual payment, or down payment. Let’s take a brand new Honda Civic for example; a lease on a new Civic with 0 down payments is typically about $300 per month before taxes. With the residual buy back value set at 50% of the M.S.R.P (Manufacture’s Suggested Retail Price) a 20,000 Civic will usually carry a residual value of 10,000 after 48 month.
Leases are also know the payment of the depreciation which means the monthly payment usually matches the depreciation on the asset. Let’s look at a real example; this calculation is taken on December 24, 2009 from www.Honda.ca.
A 2010 Civic DX-G automatic transmission’s M.S.R.P is $19,780 with FRI/PDI at $1,395, there are additional costs such as air condition tax of $100, making it to be $21,275 before G.S.T and P.S.T. On the road the price will be $24,040
Now, the above example will be a “cash purchase” scenario, without any manufacture’s incentive or dealer discounts, same scenario taken to a lease will cost you the consumer $285 per month before taxes, or $322 per month total. That is with 0 down payment for 48 month and lease rate of 3.9%. So how much would you have spent in 48 month? $322 x 48 = $15,456. The buy back value or “residual” value is $9,890 before taxes, or $11,175 after taxes. Adding together all the cost involved in this type of transaction, your total amount spent on the vehicle would be $26,631. Which is $2,591 higher than cash purchase option. That $2,591 would be the cost of your lease, assuming you have bought out the vehicle at the end of your lease. Not to mention if you didn’t purchase this vehicle it would cost even less.
Financing in this case would be $529 per month also for 48 month term with 0 down payment. $529 x 48 = $25,392 in total which makes it $1,352 higher than cash purchase option. The $1,395 would be your cost of finance over 48 month terms. However the things to consider would be the monthly payment of finance is 63% higher compare to the lease payment. And interesting enough if you take the different of the two payments 529 – 322 = 207 and multiply the difference over 48 months you get $9936. Hey that is awfully similar to your buy out amount right?
So in conclusion if you had the choice to “own” a vehicle via financing, but be careful with the word “own” not until you paid off the entire loan than you truly own the vehicle. But paying close to double the amount in monthly payments. Or you can “lease” a vehicle for a lot less, and a chance for you to return it at the end of your lease without hassle. You can pick the best option for yourself based on your current situation.
Thank you for reading this article it is brought to you by Used Lexus Toronto you can find us online at http://www.usedlexustoronto.ca we are your Used Lexus Toronto, we are your bad credit car loans service provider.
