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I typically grow tired of my vehicle in four to five years. Should I lease or buy?
You should probably lease.
Typical finance terms are 60-72 months -- Why pay the higher payments if you are changing your vehicle before the loan is paid?
When you finance your vehicle, you bear the cost of declining resale values.
My car was involved in a severe accident and the repair cost was close to $10,000. Who would be worse off: a person who leased or the one who financed?
The person who financed is in trouble here because the accident will cause a considerable drop in the vehicle's value.
Providing the vehicle is repaired correctly, the person who leased can return the vehicle to the leasing company.
The leasing company then absorbs the depreciation caused by the accident.
What is the difference between an OPEN versus CLOSED lease?
The consumer is responsible for the lease-end value in an OPEN lease.
Conversely, the leasing company is responsible for the lease-end value in a CLOSED lease.
Typically, many third party leasing companies have OPEN leases, whereas Honda Canada Finance has CLOSED leases.
A CLOSED lease protects the consumer against vehicle depreciation.
What is GAP Protection?
Most leases have automatic built-in Gap Coverage, while car purchase loans almost always do not.
Gap Coverage, or Gap Insurance pays the difference between what you owe on your loan or lease, and what your vehicle is actually worth if your vehicle is stolen or destroyed in an accident.
Why is gap insurance important?
In these days of long-term loans, refinanced loans, and little or no down payment, to be "upside down" -- to owe more on your loan or lease than you car is actually worth is a regular occurrence.
If your vehicle is destroyed, you could be "upside down" thousands of dollars without GAP Protection.
Honda Canada Finance leases have GAP Protection Included!
If you have any further questions or concerns regarding leasing vs. financing, contact us at 905.695.888 ext. 314.