The Toyota Lease Advantage

Should You Lease or Finance Your New Vehicle?

When purchasing a new vehicle, you’re faced with the tough financial decision to lease or finance your purchase. There are a lot of questions when it comes to the advantages and disadvantages of leasing and financing, but the truth of the matter is it all comes down to your lifestyle and current situation.

Based on our data, most people in our area  tend to keep our vehicles for about five (5) years and drive an average of 110,000 KM before attempting to bring their vehicle in for something new. Want to see where you stand? Take your current mileage and divide it by your vehicle age and that will give you your yearly average km traveled to compare yourself to this statistic.

One of the biggest factors in determining the feasibility of a lease is the residual value of the vehicle. Since the premise of a lease is 'only pay for what you use' a vehicle with a better residual value will be less expensive to lease. Toyota's unrivaled Canadian Black Book Resale Value track record puts us at the front of the pack when it comes to residual values. Since our vehicles hold their value better than anyone else, our lease residuals can be higher. 

Toyota Lease Advantage 

Leasing has unfairly earned a bad reputation. For many customers, especially here in Newfoundland, it's objectively the better choice. Leasing provides you with the opportunity to take out a vehicle for a short period of 24 – 60 months, gives you the opportunity to buy out the vehicle at the end of your lease if you want to keep it, requires no upfront cash down, and allows you to enjoy much lower monthly payments. 

There are still some hesitations to the idea of leasing due to stories of people feeling that they have been burned from leasing in the past. Some people have experienced large lease-end bills for damage to the vehicle upon returning it at the end of their lease. The Toyota Wear Pass (at just $745) covers up to $4,000 in damages at the end of your lease. It's excellent value and we strongly recommend it. It protects you from damage beyond what is considered normal everyday use at no additional charges to you upon the return of your lease. There are some limitations, so get in touch with us for details. 

We'd also like to mention here that if you damage a vehicle you've financed, you will still 'pay for it' with the reduction in resale value when it comes time to upgrade. 

Although Leases have yearly kilometer allowances built into the contract, they are seldom of importance. Why? Well for one, on average Newfoundlanders drive about 22,000 km every year. Even with a few trips to Costco. Our most popular lease option is a 60-month term with a 24,000km yearly allowance - giving the 'average' Newfoundlander 10,000km of flexibility. Now, a second important consideration: The annual KM's only matter if at the end of your lease you plan to drop it off to us, but with Toyota’s high resale values, many customers find that their vehicle is worth more than the residual at the end of their term, and end up with a little money in their pocket or towards their next deal. 

Leasing also allows you the perk to upgrade your vehicle more often due to shorter-term agreements and with less risk than that of a financed vehicle. That means you can always have a vehicle that fits your lifestyle and is up to date with the latest technolgy, style and safety features. 

Toyota Finance Advantage

Financing has traditionally been the go-to when it comes time to purchase your new vehicle. Financing allows you to take out much longer terms so if you’re planning on purchasing your vehicle and keeping it long-term, you can finance for up to 84-months on a new Toyota. We have new programs every month from Toyota Financial Services and our other financing partners (Scotiabank, BMO, TD, Royal Bank, etc.) with great offers. When comparing lease vs. finance, some people like to say "well, when you lease it you don't really own it." We have one cheeky salesperson who likes to say, "well, if you stop paying for the financed vehicle, you'll find out who owns it pretty quick!"

Toyota vehicles are known for having the highest resale value in the industry. So after your finance term is over you can still sell or trade your vehicle and get great value, especially if it's been maintained according to the factory recommended maintenance schedule by our technicians. However, even with Toyota’s hard-earned reputation for reliability and long-term resale value, very few of our customers keep their vehicle for 10+ years.

What’s The Right Choice for You?

When it comes down to it the decision to lease or finance can and will be different for everyone. We'd encourage you to get in touch with our Product Advisors to explore what would be a good fit for you and your family. Very few customers keep a vehicle for long enough that they truly 'come out ahead' by financing. 

It’s important to look at all the facts when it comes to Leasing or Financing your next vehicle to ensure you make the choice that best suits your and your driving habits. We've covered a few points in this article, but our knowledgeable team at Western Toyota is also here to help with your decision so if you have any questions at all, feel free to give us a call at (709) 639-7575 to discuss the Toyota Lease Advantage and how it can work for you.