Discussions

I’m considering doing this for my next vehicle.. I’m looking at the pros and cons at the moment but I’m looking at others experience with this. Some questions I have are: what was your experience when it came time to turn the vehicle in, was it more money to insure a leased vehicle?? If your in an accident with a leased vehicle what happens? Does an accident mean this ends your lease or you just get a new vehicle? Driving a new car with warranty is attractive to me but worry about the leasing thing as I wouldn’t technically own the vehicle. Any thoughts?? What was your experience with a leased vehicle??

I leased and then bought out at the end. I didn’t even try to return the vehicle be/c I had a couple scratches on the side and still really liked the vehicle. (When I bought it out had to get it re-safetied but insurance was the same price). I liked the lower lease payments at the time but I can’t imagine it’s a better deal than financing overall. I was rearended during the lease and the dealership didn’t seem to care when I called them to let them know and see if I had to do anything special (while also dealing with MPI).  
 
I highly doubt if you’re in an accident that’s the end of your lease and you get a new car lol.

While I have opinions about the wisdom of leasing generally, the answer your questions regarding the insurance side of things you can look at the MPI website: https://www.mpi.mb.ca/en/PDFs/LCPBrochure.pdf  
 
Basically, if you're in an accident they will fix the car same as if you owned it. If it's written off, the settlement amount goes to the owner AKA the dealership you are leasing from. Unless you have supplementary insurance (see above .pdf) you risk losing your down payment and would have to come up with a new one if you wanted to buy or lease another vehicle. It's similar to new-car coverage.  
 
In other words, your lease would end (as the vehicle no longer exists of written off), and unless you have the supplementary insurance you'll be left with nothing to start a new lease with.

To both I guess.. I like the idea of a lower monthly payment but hate the thoughts of “renting” my car!! At least with a finance there is an end to the payments.. with a lease you pay to infinity and longer time to pay.. sigh.. don’t know what to do.

ece2 said "To both I guess.. I like the idea of a lower monthly payment but hate the thoughts of “renting” my car!! At least with a finance there is an end to the payments.. with a lease you pay to infinity and longer time to pay.. sigh.. don’t know what to do. "

Depending on the vehicle, most people need 6 or 7 years finance to pay it off.. so you've got payments for a long time and once its paid off you'll likely be tired of it and go into another 6 or 7 year loan anyways so the payments never really end unless you plan on keeping a vehicle forever.  
 
I would either lease or finance a used vehicle you can afford to pay off in 3-4 years.

Why would you lease unless you own a business and can right it off at the end of the year. Leasing you never actually own the vehicle So your putting your money towards nothing.  
 
You have to sit down and figure out for yourself how much you will be using the vehicle. How many KM a year will you put on a year and what not. To the poster above saying buyers get bored with their vehicles after 6 years... well they shouldn’t be buying vehicles in the first place.  
 
You have to remember a vehicle is a terrible investment. It depreciates every year no matter what so in the end you lose money anyway. If you can buy a vehicle that you don’t get “bored” with and can drive it for 10 years then that’s money well worth it.  
 
Buy a vehicle well within your budget and have it paid off in 5 years. If you’re a city Driver and don’t put a lot of KM on your vehicle a year than that’s ever better. We have had our equinox for 5 years, it has 78,000km on it. Our vehicle is paid off. We like be our vehicle and will most likely drive it for another 5 years.  
 
It’s all about YOUR situation

ece2 said "I’m considering doing this for my next vehicle.. I’m looking at the pros and cons at the moment but I’m looking at others experience with this. Some questions I have are: what was your experience when it came time to turn the vehicle in, was it more money to insure a leased vehicle?? If your in an accident with a leased vehicle what happens? Does an accident mean this ends your lease or you just get a new vehicle? Driving a new car with warranty is attractive to me but worry about the leasing thing as I wouldn’t technically own the vehicle. Any thoughts?? What was your experience with a leased vehicle?? "

MPI cost would still be the same as financing. The additional insurance you would probably need is the one Honda offers if you have dents or scratches more than what they consider as normal wear and tear. If you get this then you don't have to worry about paying out of pocket at the end of the lease term to get it fixed. There is also a leased car protection insurance to cover you if your car is written-off (same with financed vehicles you'd want a GAP insurance). If your vehicle gets into an accident, you would still do the same thing as you would with a financed vehicle (have it repaired, etc.) and it doesn't end your lease agreement.  
I have leased my car for about a year now but not with Honda and I feel like it was not a bad financial decision because payments are way lower.  
Honda vehicles are reliable. They also have high residual value which means you are still building equity and at the end of your term you may still get some money back. So if your lifestyle is about changing vehicles every 4-5 years then leasing might be for you.

I leased a 2016 civic with my company through Honda, 8 months after, an other driver crossed an intersection in front of my. They wrote off my car after that accident, great saftey features by the way. New car insurance is placed on the vehicle by Honda to protect them on any lease. Essentially, I got a new 2017 for the same price, and a renewed 4 year lease. I was expecting a lesser payment, only because I took a bath on my trade in for the original lease, and I expected that portion to be paid down more than it was. At least my sales person got 2 sales from me in less than a year.

As Spiox said, it will depend on your driving habits and what you want from your car. Do you typically trade it in after 4-6 years? In that case, leasing may be the best option for you.  
 
Honda vehicles are generally quite reliable. For myself, I get satisfaction after my finance term is paid out after 5 years and I know I still have a good 10 years left of a working vehicle and no more payments!

I used to be all about buying, not leasing. But when it was time for me to purchase my first brand new vehicle - I actually did a ton of research and ended up leasing for my own situation, which I think in the end will be a good decision.  
 
My reasons were that I typically don't put a ton of mileage on my vehicles so this was not a concern and I wanted lower payments. For financing, lower payments meant that I had to put a bigger down payment on the vehicle. I did have money from sale of old car as well as some savings to put down on a new car. But in the end I weighed it out, and I wound up leasing, knowing what the buyout will be in 4 years ... and taking that down payment that I WOULD have put on a brand new vehicle and investing it. Now, in the four years that I'm leasing, that money is making me money and when it comes time to buy out, I can pull it out and use it to buy out my car - or perhaps in 4 years something in my life may have changed and maybe a different vehicle will suit me better and reassess then. (I currently love the car I got, but hey - you never know what the future will bring!)  
 
Leasing seems like 'renting' a car - and in some ways it is. But you have to remember that regardless of what you do, your vehicle is depreciating. So even if you buy you're still losing the money. A lease payment is basically just a depreciation payment.  
 
Everyone's situation is different, and everyone has different needs. But I am happy with my choice to have the lump sum 'down payment' money currently helping me out in an investment instead of just being put towards the depreciating vehicle at this point in time! Hopefully over the course of 4 years this will save me a couple thousand dollars.  
 
Good luck with your decision!  
 
Edited by MacBook, 2018-05-03 12:26:54

I am currently leasing a vehicle with Honda. If you're a person that wants to get a new vehicle every few years then I would say leasing is a better way to go. That's why I decided to go with the lease.

LeanneR said "I am currently leasing a vehicle with Honda. If you're a person that wants to get a new vehicle every few years then I would say leasing is a better way to go. That's why I decided to go with the lease. "

I would like to drive a new vehicle more often. I’m looking at a Pilot. I’m just not sure about which way to go!! Honda’s hold their value it seems so I’d i love it I could buy it out... if I don’t I could get into something else tho. I guess I need to sit down with the dealership and figure out which way to go..

ece2 said "    LeanneR said "I am currently leasing a vehicle with Honda. If you're a person that wants to get a new vehicle every few years then I would say leasing is a better way to go. That's why I decided to go with the lease. " I would like to drive a new vehicle more often. I’m looking at a Pilot. I’m just not sure about which way to go!! Honda’s hold their value it seems so I’d i love it I could buy it out... if I don’t I could get into something else tho. I guess I need to sit down with the dealership and figure out which way to go.. "

If you think Honda holds value.. it's a hit and miss. It will hold value if you lease and then if you want to buy back in full.  
 
If your going to finance for the same term. You will loose money as value will be a lot less.  
 
Also doing lease every so often to be in a new vehicle is not everyone's thing. You definitely need to budget for it. It can be risky as well..  
 
I also sent you a msg in the inbox.

I replied.. thanks for the insight everybody. Still not sure but will weigh both options.

Ebrandon is the worst place to ask for advise, just reading this post about leasing and i truly think either your sales guy knows nothing about leasing and financing or you did not get the grasp of it. But trust me of this, don't listen to ppl about this cause honestly they have no idea and dont know the full story. just my thought. GO to the dealership if the sales guy cant help then ask for someone that knows.  
 
I lease, best decision i have made but it works for me and may not work for everyone. I dont know business.  
 
If you still can decided, pm me and i can explain it over the phone. I know the pros and cons of both and i want to help you understand before you make this purchase.

Leasing truly is just alternative way to finance a car. There is a selling price of a vehicle and there is a remaining balance after the term (typical term is 4 years), which is usually around 40% of the original selling price of the vehicle.  
 
People say “you don’t own the car”, but really even on a finance you don’t own the car outright until the last payment is made, it is very different to a lease on an apartment.  
 
At the end of the lease you can buy the vehicle out for the guaranteed value (the remaining 43%), this amount can be financed. This number is stuck in stone from the start, meaning your protected in many ways (I’ll explain further). A typical lease is for 4 years.  
 
The key to a lease is that it is less commitment, in order to get a finance payment to be as low as a lease payment you would have to finance a car for 8 years, which is a long time. People often don’t keep cars that long and it brings in complications when you want to trade in before the end of the finance. So a lease is less of an obligation as far as time goes.  
 
Also on a finance you pay taxes on the selling price, where as a lease there are no taxes added on at the start, you pay it monthly. So a $30,000 vehicle on a finance or cash would be $33,900 where as a lease would be a balance to finance of $30,000 and the lease payment would be plus tax. So initially you are borrowing less money and if you want to make another large purchase like a house, the lending bank would see less of a debt. Also the tax rate in Manitoba is 13%, so if you moved to Alberta half way into a lease, your payment would in fact go down 8%.  
 
Also the concern at the end of the lease is that you return it and get nothing back, this isn’t the case. On a lease, if the value of the vehicle is higher than the remaining balance at the end you would get that back. Now the key is this next point: if for some reason the vehicle is worth less because of "market conditions" or "accident history", that is the manufacturers issue and if the remaining balance on the vehicle is $14,000 and the vehicle is only worth $11,000 because of the large accident you don’t have to worry about the $3000 carry forward. Where as if it was a 8 year finance and then you would have to add the $3000 to the next vehicle.  
 
Also the manafacturer add GAP protection to the loan, this means that new car protection at mpi doesn’t need to be bought and will save you $10 a month on insurance. GAP protection in the event of a write off will pay out the whole loan in full meaning there will be no shortfall when MPI payout. If there is equity, the manafacturer would pay out the loan and give the client the equity.  
 
At the end of the day it comes down to preference, some people don’t like payments and some people don’t like the term leasing. One thing to think about, even if you buy a car cash for $33,900 after 4 years it would be worth the same as if you leased it, the questions is wouldn’t you rather lease it and pay it monthly down to that point than take money out of an appreciating asset like a tax free savings account etc.  
 
Leasing makes sense with some manufactures and not others, because it’s based on how quick a vehicle depreciates. If a vehicle depreciates quick, it means the 4 year lease payment would be high and not "attractive". So companies like Honda and Toyota it makes total sense to lease as they hold values very well.  
 
It does come down to numbers though and here are some examples that i think will really help with the "which one is better"?. These are true numbers on a 2018 Honda Civic Lx.  
 
Selling price for Lease, Finance and Cash are all the same: $23118.  
 
Finance for 84 months at $160.53 bi-weekly. ($26123.81 balance to finance on a finance)  
 
Lease for 48 months at $154.58 bi-weekly. ($23636.17 balance to finance)  
 
After 48 months the remaining balance is ($10,075 which can be financed).  
 
The key behind this is that for the first 4 years the cash flow for the lease is an extra $6. Also the remaining balance on the finance after 4 years (when the lease would be ending) is $12057.24 (160.53 bi weekly x 3 years).  
 
So the remaining balance after 4 years is $1982.24 less on a lease, so in total the lease saves you $2398.24.  
 
Just a little bit of info,