The difference in Leasing and Financing

We are one of the best-known providers of financial loans in Calgary, Alberta. The breadth of services that we provide to our esteemed customers comprises of lease, financing and loan for vehicles, machinery, construction equipment, including heavy construction equipment for multiple uses. People find our services user-friendly and our approach to splitting up the repayment options very convenient for the end user. Our objective is to satisfy the end users with customized service offerings that will help the user to plan the repayment option based on his level of comfort and convenience. From various loan and financing options provided by us to the users of the region, we are known for heavy construction equipment loans in Calgary. No wonder because of our flexibility in adhering to customer friendly policies the people of the region do avail construction equipment loan in Calgary. 

We do make an effort to apprise our customers of all our user-friendly policies and also bring them up to speed about various terms and jargon used in this industry. We find that people at times are not familiar with terminologies used in the leasing and financing industry and it is a sincere effort from our side to educate our prospects and customers about these industry-specific terminologies used.

We also make an attempt to educate people about the basics of loans, financing and leasing that people wish to avail. For instance, when a customer finances a car, the entire cost of the vehicle, including fees and taxes, is stretched out over the length of the term. The shorter the term length, the higher the monthly payments, and the longer the term length, the smaller the monthly payments. Although the average car loan length is roughly 6-7 years, payments for a financed vehicle will eventually end. Alternatively, with a leased vehicle, monthly payments are calculated by the vehicle’s residual value, the value of the vehicle that is leftover once the lease is finished, and the car’s total sale price. Because this number is often lower than a loan for auto financing, monthly payments when leasing a vehicle are known to be more affordable.

At the point of time when the term on a leased vehicle is up, the customer is required to either buy-out the vehicle or return it and repeat the process. Most customers who choose to lease don’t buy the vehicle and instead return it for a new vehicle and new lease, which restarts the fresh payment process. The payment cycle on a leased vehicle can be a turn-off or a show stopper for the customers who want to own the car at the end of the term.

Leasing a vehicle is a convenient option for those customers who aren’t interested in owning a vehicle and search for lower monthly payments. The leasing process is also appealing to people who prefer changing their vehicles every few years to models that are newer and are much within the warranty period.

Although leasing a vehicle might seem financially convenient regarding lower monthly payments, over time, the cost of leasing several vehicles will eventually be higher than the cost of owning a vehicle. When you finance a vehicle, you’re given the freedom to use the vehicle at your convenience, regardless of the mileage of the vehicle. With a leased vehicle, there is a set mileage limit, and going over the limit on a leased contract results in hefty fees.

Additionally, borrowers who finance a vehicle aren’t required to return their vehicle – once it’s paid for, it becomes their property for a long haul. Leasing a vehicle means you’re stuck with the vehicle and payments until the lease is over and returning it before the lease is up can be a very costly affair. For people who finance and want to return their vehicle due to financial or lifestyle changes, options, like refinancing and trading in the vehicle, are common and easy to do. When you opt for a lease, these options aren’t available to you.

 Some wear-and-tear is bound to happen over the course of a leased term, that is understood by the financing firms, however, any substantial wear & tear of a leased vehicle will come straight out of the pocket of the borrower. The difference between cost, convenience, and flexibility of leasing versus financing are major and need to be extensively researched before deciding which path to take. Other factors that need to be considered are the penalties that come alongside leasing and financing.