It's time for leasing to be explained in "Layman's Terms" !
understanding volkswagen leasing brantford
First things first......
LEASING DOES NOT WORK FOR EVERYONE!
(In case you've been told otherwise!)
It's probably safe to assume that if you, or someone you know who has had a bad experience with leasing, they probably ended up in the contract without being presented with ALL of the details & information OR was not consulted properly based on their driving habits.
Leasing may work for you if.....
The Benefits of Leasing
You only pay for the portion of the car YOU will use!
Monthly payments are based on your estimated km's over the selected lease term, therefore YOUR "usage". See image below for the visual explanation!
Lower monthly payments than a finance loan (More car for less money)
A portion of the total value of the car is 'set aside” until the end of your selected lease term, and is NOT Included in your monthly payments. This 'set aside” amount is called an end value, residual value or buyout value...yes, many names for the same thing!!!
Save Tax (Who doesn't want to do that?)
You only pay tax (HST) on the monthly payments during the lease term, not on the "end value". This 'end value” is optional for you choose to pay & keep your car & only then do you pay the tax on the end value. If you return it at the end you don't pay tax on it! (Having options are always nice!)
Less Financial Risk
As long as you keep up your end of the bargain, which with VW is clearly outlined & decided by you at the beginning, you maintain your car, stay within your total allowable km's (as chosen by you at time of signing), have the expected wear & tear (also clearly outlined by VW), you literally can walk away at the end. Which means, if the market value on the car has dropped, due to economic changes, a new model replacement has come out, or anything beyond YOUR responsibilities, it becomes the finance companies financial loss, & not yours! Where (as an example) if you had financed or bought the car outright & you wanted to trade-up in the same time frame you could be at a financial loss, even if the contributing factors to cars value are not within your control (eg. economic changes, new model replacement, etc.)
Flexibility for the future
Lets face it, a car is a major purchase & it's not always easy to plan life years in advance. By doing a lease, you have the option to drive the car for the term of the lease, & 3-4 years later. You can either drop it off to move up to a nicer model if life dictates, or a bigger one maybe your family has grown, or perhaps move to a more economical model, if times are tight. All without the risk of it's value causing you financial burden. But maybe you have adored the car & decide to pay the end value (which we can help you finance at the best current bank rates) to keep it. Therefore you 'buy your own used car' (at least you know the previous owner!!), & often at a better price than they are currently selling for on the lot. Leasing means more choices.
Avoid accident repair depreciation (less out of YOUR pocket)
By leasing you have the huge benefit of NOT having to take on the inevitable depreciation that a car's value will face after having an accident repair. Should you have an accident during your lease term, as long as it is repaired correctly at a reputable repair facility, you can still return the car at the end of your lease, with no additional charges to you as a result of the accident. NOT SO if you own or financed the car. In this case, due to full disclosure laws, you must disclose any accident repairs, & regardless of how perfectly the repair was done, the value of the vehicle WILL be depreciated accordingly on a trade in value, coming out of your pocket.
NO CHARGE Gap insurance
In the unfortunate situation where you may have an accident & your vehicle is deemed a total loss or a "write off" by the insurance company, you are protected with a lease. Therefore, you do not have to pay out of pocket, if the total buyout on the lease contract is higher than the insurance settlement amount. NOT SO if you own or have financed the car. You will have to pay out of pocket if this difference occurs, (unless you opt to purchase extra coverage when you buy or finance your car).