Should You Finance or Lease Your Cadillac?

Capital Cadillac - Financing and Leasing a New Cadillac

If you’re in the market for a new vehicle, payment options are probably on your mind. It comes down to three options: an all-cash purchase, leasing, or financing. Depending on your financial situation and the reason for getting a new vehicle, one option may be more appropriate for you than the others. We’re here to break down these options for you so you can make an educated decision on your next vehicle purchase.

All-Cash Purchase:

This is an option worth thinking about. Many people think that buying a vehicle with cash is better than financing or leasing because you won’t have to pay interest. Realistically, finance rates are usually pretty low and you could benefit from investing the cash elsewhere. Buying a new car with cash is sometimes the right move, but it’s typically in your best interest to shop around to find the best option and save or invest your money where it can grow.

Leasing:

More and more people are discovering the benefits of leasing. Whether it’s a new CT6 or maybe a new DSLR camera or MacBook. It’s a great option to stay ahead of the game and stay on top of current trends. In simple terms, every vehicle lease payment is like a rental payment and when your lease term is up, you return the vehicle to the dealership.

The benefits:

  • You receive affordable payments with shorter terms
  • You can usually stay within the factory warranty period for the duration of your lease, giving you a worry-free driving experience
  • When your lease term is ending, you can trade in your vehicle and upgrade to something current, drop off the keys and walk away, and you can avoid the potential risk of your vehicle losing value. Or if you love the vehicle, keep it! We can arrange a new financing term so you can own the vehicle instead.

The disadvantages:

  • If you like to drive more than the average kilometres per year, it could end up costing you at the end of your term
  • Requires good credit and typically requires some money upfront
  • If you like customizing your vehicle, this would prove to be difficult because you must return the vehicle to the dealership in the same condition as you received it
  • If you want to own your vehicle at the end of the lease term, the total cost is usually higher than if you financed the vehicle from the beginning

Financing:

When you are financing a vehicle, the lender holds a lien against it. At the very end of your payment term, you own the vehicle free and clear. It becomes a paid-off asset that you’ve built equity with each payment. This can be very rewarding and beneficial if you’re seeking to build your credit score.

The benefits:

  • You can build equity from your monthly payments
  • Once the loan payments are completed, you own the vehicle and in turn, have the option to sell or trade
  • You can modify the vehicle and drive as many kilometres as your heart desires

The disadvantages:

  • Your monthly payments and term will generally be higher
  • Your vehicle will almost instantly lose value, depreciating shortly after purchase. It may be worth very little by the time it’s paid for.
  • Maintenance could get costly because of the vehicle’s age

In today’s market, there are plenty of options to get you into the vehicle your eye is on and ultimately, your payment options come down to your finances. If you’d like more information on leasing, financing, or a cash purchase, our team would be happy to work with you.

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