What happens at the end of the car lease
There can be some unpleasant surprises at the end of the lease, added Wallcraft. The vehicle will be thoroughly inspected for damage, and if you exceed the mileage specified in the contract, you will be charged a fee. “It can be a staggering amount at the end of the whole thing,” Wallcraft said, “and there’s no way out of it.”
When can you buy a car in Canada?
When you finance a car to own it, however, you start out with negative equity—you owe more on the car than you have to sell for it—but after a while, that equity shifts to you. “It takes a few years, depending on the length of the financing,” Wallcraft said. “It takes time when you pay enough money to be able to sell it to get its value.”
For car enthusiasts looking for a new ride every three or four years, financing to own still has the merits of leasing, Wiebe said. “Even if you buy cars every three years, you can still come out ahead by buying and selling because at least you are doing something by creating ownership of the car you are paying for,” he said.
“But for many young people, buying and owning for a long time will free you up to be able to put money elsewhere, especially in long-term savings.”
Advantages and disadvantages of leasing an EV
Regarding electric vehicle (EV) leasing, Wallcraft called the financial pros/cons analysis “less predictable” in this relatively new market. The residual values of EVs are not fully understood, the value a vehicle has over time, on which lease payments are based.
But leases are more difficult to break, Wallcraft notes. So if you don’t like the EV lifestyle and all it entails, you’re stuck or you’re doomed.
“I can’t imagine how difficult it would be to try to release an EV lease and try to find someone who wants to take that segment when there’s really only 10% of the market showing strong interest in EVs today,” Wallcraft said. . “That will change over time, but that will be very difficult. It’s better to finance with money you can afford, and even if you don’t pay it off completely, at least the car is yours to decide what to do with it.”
So who is renting?
Wealthy clients, mostly. There’s less drama with a new car that’s under warranty, Wiebe said. “Let’s say you enter a paying job that requires a lot of your time,” he said. “You don’t need to deal with buying and selling a car. You sign up, you get that easy payment, everything is under warranty, and you take the time to pay it back and you have to think about that area of your life.”
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