Understanding leasing

Many people do not even consider leasing as a potential option for purchasing a vehicle. People choose financing because that is what they have always done. Leasing should be considered a viable purchasing option. Especially with Toyota. Often people say “Yah but I don’t own the vehicle if I lease it”! A better question is who owns the vehicle when you are making payments on a $20,000 vehicle loan? The bank does. It is generally understood that a vehicle depreciates (even Toyota’s) the most in the first 2 years of purchasing. With a lease this cost is Toyota’s not the buyers.

GAP Protection on Leases Only

Toyota offers something called GAP protection that is automatically included with all Toyota leases. Basically If your vehicle is declared a total loss, GAP will cover the difference (the gap), after you pay the deductible, between what you owe on the remainder of your lease and the amount of your insurance settlement. You are only responsible for excess kilometre charges and any pre-existing damage to the vehicle.

Leasing gives you much more flexibility than financing. Typically leases are a shorter duration and offer more options. At the end of your lease you can hand the vehicle back to the dealer or if you have fallen in love with your vehicle you can buy it out. Lets face it; it is pretty difficult to decide if you like a vehicle after 2 test-drives. Some people like change and not being locked in for many years to a commitment. Leasing offers these advantages.

Lower Monthly Payments

Another advantage to leasing is that the payments are typically substantially lower than financing. This can be very attractive if your monthly budget is squeezed. When you lease, you only pay tax on the monthly payment. When you finance, you pay taxes on the full purchase price of the vehicle.

Leasing can be considered “paying for what you use”.

Monthly payment differences on a lease compared to financing

Toyota Leasing Versus Financing – PaymentsThe MSRP and rates used are approximate and used only as an example.

Leasing is not for everyone. However if you want lower monthly payments and flexibility then leasing might just be the right option for you. Keep an eye out for regular leasing incentives by Toyota.