Cambridge Centre Honda

Financing vs Leasing

To finance a car means to take out a loan, using the car as collateral in order to protect the lender in case a buyer defaults on the loan. Financing a car is usually done through a bank, credit union, or through the financing arm of the automobile company being Honda Financial Services.

Car Financing deals can take the form of reduced interest rates, attractive introductory rates or payments or cash incentives

Loan payments are paying the car's entire purchase price, along with interest charges, fees and taxes.

To lease allows you the use of the vehicle during the term for a monthly fee, but you do not own the vehicle. Lease payments are cheaper than loan payments because you are essentially "renting" the vehicle.

Under a car lease, the financier(Honda Financial Service) purchases a car on behalf of the customer, in return the customer agrees to pay monthly rental payments.  Lease payments go toward covering the car's depreciation during the period you are driving it, along with its taxes and other fees.

At the end of the term of the lease, the financier gives the customer the option to own the vehicle in return for a final installment (residual value).

Alternatively, the customer may choose to "trade in the vehicle, or re-finance the residual and continue the payment.

You may choose to lease if you need the lower payment or if you simply prefer to drive newer cars with up-to-date features

Pros for Financing:

• You no longer have to pay once the loan payments are completed.

• After the payments are completed you can sell the vehicle or trade it in for a new one.

• Your insurance rates may be lower with an agreement that you are on.

• You can modify the vehicle any way you like without any restrictions being imposed on you.

• No restrictions on mileage.

• Make changes to car's appearance

Pros for Leasing:

• Flexible contract terms ranging from 24 to 60 months (2-5 years)

• Fixed Interest rates

• Costs are known in advance

• A residual can be applied to a lease, lowering monthly payments

• Tax reductions are available when the vehicle is used for business purposes

• Lower expenses because the vehicle is generally covered by a maintenance plan and a warranty

• People who like to drive new vehicles every few years will pay less for their vehicles by leasing than buying the car

• Attractive to business owners allowance as they can use the monthly payment as a "write-off" on their income tax.

      


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Links of Interest
 
My Honda.ca 
Log on to www.my honda.ca  today and click on "Register Now" to:
- View your service history
- connect with your Dealer, Honda Canada, or Honda Financial Services      via  the Message Centre
- Request a dealership appointment
-Read through your vehicle specifications and owner's publications.
- View the latest Honda news
- And more...!
- Click on "MY FINANCE" tab to begin managing your financial account online


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