Interested in getting into a brand-new car but still have some questions about leasing? In this article, we’ll explain how Toyota Financial Services leases work and the benefits of leasing a car to help you determine if leasing is right for you.
WHAT IS A CAR LEASE?
When you’re in the market for a brand-new vehicle, you can lease it, finance it or buy it outright. A Toyota Financial Services Lease is an agreement that includes a fixed period of time you drive the vehicle for, the fee you’ll pay in exchange for driving the vehicle, the maximum kilometres you can drive during the lease and what the car will be worth at the end of your lease agreement – also known as a Lease End Value (LEV).
Leasing a car is a popular option amongst Canadian drivers, as it allows the driver to enjoy a brand-new vehicle without all the obligations that come with owning a large asset. That means less financial commitment, no long-term maintenance costs, and zero resale hassles. Essentially, leasing a vehicle allows you to pay for the portion of the vehicle you actually use.
HOW DOES LEASING A CAR WORK?
Toyota leasing options are flexible, so you can customize your lease agreement to make it just that – your lease. With lease terms from 24-60 months available, you choose the length of your contract. Plus, car leases are transferrable, meaning that if you no longer want to drive your vehicle, you can return a car lease early and sell the remainder of your lease or transfer it into someone else’s name. You also have the choice of driving 16,000, 20,000, or 24,000 kilometres per year on your lease, but you can always purchase extra kilometres before your lease agreement begins, or at a higher rate after you’ve entered into the lease term. However, the higher km selection the higher lease cost since the vehicle is used more and you pay the price of the depreciation.
In addition, although maintenance costs of new cars are typically very low, Toyota Financial Services offers the optional Wear Pass Plan, which covers far more than the average driver’s wear and tear – from coffee stains and scratches all the way to cracked windshields and dents. It even waives 1,000 excess kilometres if you go over your agreed upon limit!
WHAT HAPPENS AT THE END OF THE CAR LEASE?
At the end of your lease agreement, you have three great options:
- Lease or finance a new Toyota vehicle.
- Return your leased vehicle.
- Purchase the vehicle for the Lease-End Value (LEV) indicated in your lease contract.
* Lease customers that are pre-approved for a new vehicle are also pre-approved for a lease-end buyout. So, if you’d like to purchase your vehicle at the end of its lease term, that means no credit checks… no problems. The entire process is simplified to help you make your leased car your car on paper.
*Additional fees may be applicable depending on your Toyota dealer.
THE BIGGEST BENEFITS OF LEASING A CAR
We’ve discussed a few of the advantages of leasing a vehicle already, but let’s go into greater detail.
Of course, there’s a much lower financial obligation when it comes to leasing a Toyota instead of financing one – you can enjoy low monthly lease payments, you can transfer ownership of a lease more easily, you don’t have to worry about long-term costs like increased maintenance fees or resale hassles, there are no upfront taxes, and there could potentially even be tax benefits for you if you lease the car for business purposes!
Leasing a car means you have several options and no long-term obligations. You can customize your lease term agreement to fit your needs, get the latest and greatest safety and technology features offered in vehicles every few years, and you’ll get to feel the excitement that comes with getting a new car more often!
Essentially, leasing a car gets you most of the benefits of owning a new car, without some of the risks. Plus, GAP Insurance is included in all Toyota lease contracts. That means, in the event of total loss or theft of the vehicle, Toyota will absorb the difference (the gap), after you pay the deductible, between what you owe on the remainder of your lease and the amount of your leased car insurance settlement.
WHAT’S THE DIFFERENCE BETWEEN FINANCING AND LEASING A CAR?
So, the benefits of leasing a vehicle sound pretty great to you, but is leasing a vehicle right for you? Even if you can afford to finance or buy a vehicle in full, that doesn’t mean it’s the best decision for your lifestyle.
Financing a vehicle is essentially when you take out a car loan (with interest rate) from the dealership, and then you pay it back in monthly installments until you’ve paid for the car in full. Toyota Financial Services offers financing contracts for up to 84 months, so your monthly payment can be made smaller with longer terms, or you can make sure you are always behind the wheel of a new Toyota with short-term loan.
The key difference between financing and leasing a car is that once the contract ends, people who’ve financed their cars now own them. That also means that financing vehicle contracts have higher monthly payments than leases. To learn more about financing a Toyota vehicle, read our article about how financing a car works.
In comparison, leasing is generally the best option if you like to drive new cars more often, want to pay lower monthly fees, and would prefer a short-term commitment.
If you’re someone who always wants the latest and greatest technology – the newest phone, the best wearable technology – then leasing a car is likely a smart option for you. It will allow you to enjoy the perks of getting a new vehicle every few years, without the added costs and commitments that come with owning a large asset.
For more information on leasing a Toyota, check out the Toyota Financial Services page or book an appointment with your local Toyota dealer.
