Leasing a Car in Toronto: All You Need to Know
Although many Canadians hope to own their dream car one day, this isn't the case for everyone. Many drivers in Toronto prefer not to make long-term financial commitments to large purchases, like buying a new vehicle from a dealership.
Torontonians who need a car for work, travel, etc. but don't want to commit to a large purchase can choose to lease a new vehicle instead. However, if you're not familiar with leasing, then leasing a vehicle can seem like a complicated process.
Continue reading to learn more about the process of leasing a car in Toronto.
What does "leasing a car in Toronto" mean?
Simply put, a car lease is essentially a long-term vehicle rental agreement between a driver and a leasing company/car dealership. When you lease a car in Toronto, you need to pay a predetermined amount to use the vehicle. Some leasing companies require drivers to make weekly payments, while others allow monthly payments.
Most car leases last for one to four years. Drivers can opt for longer or shorter leases, but doing this generally affects the price of the lease, so it's less common.
After the car lease concludes, you need to return the vehicle to the leasing company/car dealership. Once you've done this, you can either buy the vehicle, lease a new model or walk away scot-free.
Please be aware that if you purchase the vehicle, your lease payments (generally) do not go towards the end cost. Making your lease payments simply allows you to use the vehicle — this is something that drivers should keep in mind if they are thinking about leasing a car in Toronto in the future.
Lease a car Toronto — what are the benefits?
Here are some of the benefits that come with leasing a vehicle in Toronto:
Lower cost — The cost of leasing a car in Toronto is generally lower than purchasing a vehicle from a dealership. The lower price point allows drivers to operate vehicles that they may not be able to afford otherwise.
That being said, if you decide to purchase a vehicle, you can sell it after you are done with it. This enables you to recuperate some of the money you spent on the vehicle. This isn't the case if you lease a vehicle.
Car lease deals Toronto — Although most drivers prefer to go with shiny, new models, most leasing companies and car dealerships have a wide range of vehicles to choose from.
If you're looking for the best car lease deals Toronto has to offer, you may want to consider opting for a traditional model. Although these models don't feature all the bells and whistles found in luxury cars, they are incredibly cost-effective to lease.
Less commitment — As mentioned earlier, leasing is an ideal option for drivers that don't want to make a long-term commitment to a single vehicle. The average vehicle can last over a decade. So, if you don't want to buckle up in the same old sedan for the next ten or more years, leasing may be the way to go.
Additionally, if you've leased a vehicle but have found that it isn't for you, you can consider a car lease takeover. A lease takeover is the process of finding someone who is willing to pay for the remainder of your lease payments (which allows them to use the vehicle). This will enable you to lease a new vehicle, buy a car, etc.
Access to luxury vehicles — If you've always dreamed of driving a luxury vehicle, leasing may be right for you. As mentioned earlier, most leasing companies and car dealerships have a large fleet of vehicles that they can lease to drivers, including luxury models.
If you want to drive a luxury vehicle, but they aren't quite in your price range, you can get the best of both worlds by leasing.
Lease a car Toronto — what are the downsides?
Here are some of the downsides to leasing a car in Toronto:
Responsible for damage — If you own a car and accidentally scratch the paint, you can choose whether you'd like to pay for repairs or not.
This isn't the case when you lease a vehicle. When you lease a new vehicle, you are responsible for keeping the car in good condition. If you return the car with physical damage or substantial wear-and-tear, you'll have to pay for the repairs.
Kilometre limit — Most leases have a predetermined kilometre limit stated in the contract. If you accidentally exceed the kilometre limit, you will have to pay an additional fee (the fee is sometimes as high as ¢20 per kilometre!).
If you are in the middle of your lease and are about to exceed the kilometre limit, you can contact your leasing company/car dealership and extend your limit at a lower rate (compared to exceeding the limit).
You don't own the car — This can be a pro or a con depending on who you ask. Some drivers only purchase their vehicles, while others swear that leasing is the more cost-effective option. At the end of the day, it all comes down to your budget and personal preferences.
Do you need car insurance if you lease a vehicle in Toronto?
Yes! All drivers in Canada are required to have the provincial level of third-party liability insurance, regardless of whether the car is owned, leased, rented, borrowed, etc.
Additionally, all leasing companies and car dealerships also require drivers to purchase comprehensive coverage and collision insurance in order to lease certain models. Doing this will ensure that if the vehicle is damaged from a collision that you cause, involved in a hit and run, or is vandalized, stolen, gets windshield damage, etc., it will be repaired (subject to the deductible that you choose. You pay the deductible, the insurance company pays for the rest of the repairs).
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