LEASING AND FINANCING SOLUTIONS

IN RICHMOND

Make an Informed Decision

If you are not sure if you should lease or finance your next Mazda, visit us today at Signature Mazda and let our experts help you. They will provide you with all of the information regarding both buying solutions so you can make an informed decision. 

Why Lease Your Next Mazda?

Leasing provides several benefits over financing.  Imagine that you had a built-in insurance policy on your lease that allow you to either buy-out your lease at term-end, trade-up with equity or avoid a loss from an unexpected event.

Lower monthly payment. This is the first advantage of leasing. A new Mazda will have a lower payment every month when leased than when financed. Leasing your Mazda means that you will pay for portion of the vehicle with an option to either buy-out or drop-off at term end.  It also means that you can get a vehicle with more features for a lower monthly payment.

Less maintenance costs.  The best years of any vehicle's life are the first few.  Once the vehicle begins to age there are hard and unavoidable costs.  Tires, brakes, hoses, belts, exhaust systems, technology upgrades and more can begin to add up.  BCAA calculates these costs to be in the range of $200 to $300 per month in addition to the existing payments.  A client that leases a vehicle is generally out of their lease before these costs begin to accumulate.

Shorter terms. Commitment is a big word and committing to a 7-year finance program or longer is unrealistic today.  Simply from a safety standpoint alone, the technology in a vehicle today makes a vehicle 38% safer than a vehicle 5-years old vehicle.  Leasing offers the benefits of shorter commitments.

Equity positions for early upgrades.  If you like to replace your vehicle often, leasing is a great option. Your lease term will generally vary from 36 months to 60 months, meaning that when the lease is up in three years, for example, you simply give back the keys and get another new vehicle.  However, many clients have equity or very little negative equity during their lease and have the flexibility of upgrading to a new vehicle well before the leasing contract ends.

Gap Insurance.  When you lease a vehicle that has been involved in a serious accident and the insurance company decides to write-off the vehicle, Gap insurance covers the gap between what the insurance company settles for and what is owed to the bank.  If for example there is balance owing on a vehicle of $40,000.00 and the insurance company decides to pay only $30,000.00, Gap insurance covers that $10,000.00 gap and pays off the difference.  When you finance a vehicle, you are on the hook for that amount of money to be paid to the bank even though you no longer have a vehicle to drive.

Don't have to worry about depreciation. Leasing a new Mazda means not having to worry about depreciation. Every new vehicle loses value when it is sold, but when you lease it isn't your problem! Moreover, if your vehicle was involved in a collision and had to be repaired while it was leased, this could impact its resale value but if it leased that is not something you have to worry about.

The option to Buy-out or Upgrade.  There is often a misconception about leasing that you don't own the vehicle, but this is a false statement.  Leasing has the same benefits of financing but with options rather than obligations.  When you finance you are obligated to complete all payments.  With leasing once your contract ends you have choices.  If you love your vehicle, you can refinance the balance and in most cases for a loyalty rate which is lower than today's rates.  Voila the vehicle is now yours and it cost you less.  The second option is to upgrade into a newer vehicle.  We always hope that it will be with Mazda and if you decide otherwise, we can offer you alternative solutions.

Why Finance your Next Mazda?

Financing your Mazda also has fewer advantages.

Might cost less in the long run.  We say might because if you keep a vehicle for 20-years, you might balance out the cost savings of leasing.  Remember that there's always the perception that your payments are done after the finance term (let's call it 7-years) however there is maintenance and repair which we know statistically is almost $300 per month.  Also assume that you will either need a great warranty or bear the cost of major mechanical issues.  Older means less reliable as well.

No mileage restriction. For buyers who have to drive over 25,000 kilometers every year, financing might appear to be the better option as there are no mileage restrictions on a financed vehicle. Leased vehicles generally come with a mileage restriction ranging from 16,000 to 25,000 kilometers every year.  There is a caveat however; Even if you are a high-mileage driver, this mileage can be prepaid at the beginning or end of the lease.  It is generally cheaper to buy at the beginning.

 

Trade-in value tax savings. If you have taken exceptional care of your vehicle, or we are in a period of rising pre-owned vehicle values, your financed vehicle can give you more value down the road as a trade-in because of being able to save the difference in taxes.  The caveat here is that if this person had simply leased their vehicle, they would have deferred or avoided paying taxes on the unused portion of their lease.

There are truly very few reasons to finance a vehicle anymore.  Leasing covers all the bases, protects you from the unforeseen and provided you options rather than long-term obligations.  In fact every major accounting firm in North America highly recommends leasing as the better option over financing for all the reasons above.

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