Why Lease Over Finance
Leasing is more than just a lower payment. Many think leasing is similar to renting an apartment and in the end you don't own anything. Like a finance every payment you make reduces the unpaid balance of the lease. The date your lease expires you will have paid down to the vehicle's residual/lease end value, also known as the guaranteed trade in value. At this time, you have many options available:
Frequently Asked Questions
- I drive too many km and I'm worries about mileage penalties so leasing wouldn't work for me.
- Actually, leasing makes the most sense for someone who drives high mileage rather than financing. In most cases we see people take a long-term finance to keep the payments low or similar to the lease payment. What happens is you end up depreciating the car very quickly and creating a high risk of reverse equity at time of trade in, this can cost thousands. In a lease, extra mileage can be built in so you will have worry free driving and reduce the fear of extra costs at the end of the contract.
- The lease program sounds good, but after the lease is over, I don't have anything.
- Leasing creates options vs obligations. In a lease are only making payments on the difference between the sale price and the lease end value (residual). If ownership is your goal at lease end, simply pay the amount you haven't paid for, we can help with those payment options as well.
- What if I'm in a collision and my car is written off, what happens with my lease contract?
- In the event of a total loss your insurance company will treat the collision the same way if you owned or financed it. In a lease you are protected with GAP protection (deficiency between insurance settlement and bank payout) at no charge.
- Do I need to buy extra Liability insurance with a lease?
- In an HFS lease you are required to have a minimum of $1,000,000. Of third liability insurance. The Lessor carries additional liability insurance as the owner, paying for extra is not necessary.
- Is it easier to get approved for a lease than a finance?
- In some cases if debt servicing is an issue, because the payments are reduced it can be easier to get approved.
- Am I stuck in the lease contract for the full term of the lease?
- A lease like a finance may be terminated at any time throughout the finance/lease contract. Leasing has the tax savings advantage because the taxes are not capitalized, allowing for more flexibility.
- Do have to fix every dent and scratch?
- No, Honda Financial Services allows for regular wear and tear. Minor scuffs and scratches are going to be expected. Prior to your lease expiration Honda with arrange a third-party inspection to review the condition of the vehicle. Any chargeable damages will be clearly laid out before you are required to return the vehicle. Consider protecting your lease with Honda Lease Guard to fully protect your vehicle for the added piece of mind.
- Is there a difference in insurance premiums on a lease vs financing?
- No, insurance companies don't charge more for a lease over financing. But you may find savings in GAP and third-party insurance premiums with a lease. Honda Financial Services has no charge GAP insurance and only requires a million-dollar third-party liability protection.
- Do I have to follow the maintenance schedule from Honda on a lease?
- The requirements for maintaining your Honda is the same as owning or leasing it.
- Do I have to put a down payment on a lease?
- You can put down as little as zero up and to a maximum of 25% of the selling price.
- Do I have to buy the car out after the lease is over?
- All Honda leases are closed end leases, which means Honda Financial Services is responsible to guarantee the end value/residual value. The customers have options to walk away or buy it out or re-lease another Honda.
- What if I go over the mileage before my lease is up?
- It's Important to tailor your lease to the mileage you normally drive to avoid mileage overages. At time of lease end, there maybe mileage charges that will depend on what is set on your lease contract. Contact us so we can review your options, many customers are able to re-lease with little to no charges.
- Can I extend my lease after the contract is expired?
- There is some cases where HFS will grant a lease extension after the maturity date. In most cases a new vehicle is on order and its arrival date is past the lease end date.