Finance vs. Lease


Leasing:

This section discusses leasing in general. For more specific information on the value and advantages of leasing with Lexus, visit our section called The Lexus Lease.

For a side-by-side comparison of Leasing vs. Financing, click here.

For Excess Wear and Tear Plan, Guidelines, and Charges, click here.

With the Low Kilometre Leasing option you can take advantage of a lower lease payment if you drive up to 20,000 kilometres per year, please visit our Business Office for details.

The Principles Of Leasing

When you purchase a vehicle you pay the total sale price. Lease payments on the other hand, reflect only the value of the car to be used over the term of your lease. For that reason, leasing may often allow you to enjoy (at a lower monthly cost) more vehicle than you might otherwise have purchased.

As an example, let's suggest you're interested in a $55,000 vehicle that will have an estimated value of $22,000 at the conclusion of your lease. If you choose to finance the vehicle purchase in the traditional way, your monthly payments will be based on the total value of the vehicle plus applicable taxes. If you choose to lease, your monthly payments will be lower, as they will not include the $22,000 end value or the applicable taxes on that amount.

The benefits of leasing include:

1. Nominal outlay of Personal Capital

Leasing uses the capital of the leasing company. All that is normally required of the customer is a security deposit and the first month's payment in advance. There is generally no need to lay out your own money, make a large down payment, or tie up your lines of credit for a depreciating asset. (As usual, the lessee is responsible for insurance and all applicable taxes.)

2. Lower Monthly Payments

A lease payment is calculated on the difference between the vehicle's original value and its anticipated value at the end of the lease term. The term selected, cost of borrowing, service/administrative fees, expected resale value and original value all affect the monthly payment.

3. Tailored Monthly Payments

You can adjust your monthly payment to meet your driving requirements. Additional kilometres can be purchased at reduced rates at the beginning of the lease. Down payments can also be added to reduce your monthly lease payments or you can simply provide additional security deposits to lower the interest rate used to calculate the lease.

4. Efficient Vehicle Cycling

Leasing enables you to replace your vehicle every two to five years, allowing you to drive a new vehicle more often.

5. Tax Considerations

If your vehicle is used for business, a portion of your monthly payment may be eligible as a deduction against qualifying income. Expert tax advice should be obtained.

Financing:

For a side-by-side comparison of Leasing vs. Financing, click here.

The biweekly loan payment option enables you to make your vehicle payments every two weeks instead of on a monthly basis, please visit our Business Office for more details.

Convenient Financing

Financing the purchase of your vehicle is a straightforward process that can be arranged prior to, or at time of purchase. Your Lexus Representative is completely equipped to make all the necessary financing arrangements. Lexus Financial Services offers you the convenience of making your monthly payments automatically through your chequing account by using our DIRECT PAYMENT PLAN feature.

Simple Interest Financing

The Lexus finance plan uses the simple interest method to calculate daily interest charges. This is the fairest of all methods. A payment received one day early would result in an interest credit (cost savings) and a payment received one day late would be subject to an extra day's interest.

Lump Sum Payments

If, at any time, you elect to make a lump sum payment, the simple interest method ensures that you receive full value. When a lump sum payment is received, we will deduct a portion for interest earned from the date the previous payment was made and apply the balance to the principal. Consequently, you will reduce your term and realize a savings in interest cost.

Competitive rates and flexible terms

You will find that our rates are very competitive. No fee or penalty applies. The Lexus finance plan offers flexible terms that are tailored to meet you needs. Depending on the vehicle you choose and your good credit, you may qualify for terms of up to 60 months.

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