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Originally posted by aqua

Scratches, extra kms etc. dont' matter to lease vehicles, if you are buying it out. In most cases, the buy out price for the lease is less than the market price. It will make sense to buy it out and sell privately. If you are re-leasing, you can easily get the repair/excess km charges waived - as long as they are reasonable. Dealers also sell some kind of protection package (adds upto another $80-90 to the monthly payments) that will cover for the scratches (even major ones). Kms limits are normally in the 16-24K per year range. Most won't exceed them. (They keep it high - hence the residual value comes down.)

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I have a slightly different view on this topic.

First, since the OP is a new immigrant, his access to financing is limited. So even if the dealers are advertising 0% (APR??) there is a fine print of OAC (On Approved Credit). The OPs best option right now is to buy a used all wheel or 4 wheel drive VAN or SUV suitable for conditions in Fort McMurray.

For those with access to credit/financing, the decision is not black/white - but depends on the requirements :

1. How much you drive every year?
2. Are you a new driver (in N.A.) or atleast have sufficient experience driving in the local weather conditions?
3. How much are you willing to spend on repairs and maintenance?
4. Do you prefer Domestic or Imports?

My thumb rule is most domestic cars/SUV are designed for local conditions and better suited for conditions here - but short on life. They also require more frequent visits to the Garage. These are better leased and returned at the end of the lease to be switched with a newer model. Be careful of the lease contract and residual value they put in there. Besides the wear/tear and mileage figures : the down payment, % APR and residual value hugely impact the monthly cost. The dealer salesman might suggest a lower residual value so that it is cheaper to buy one at end of lease - but this will increase the monthly installment for present. Do your homework and study the residual value (depreciated current value) of equivalent model in the market and use that as a reference and try to have a residual value more than that in the lease contract. Finally, NEVER fall in love with the vehicle - if you get emotional, you will be paying a higher price for it.

On the other hand, imports are originally designed for their local conditions and adapted to conditions here - some adapt well, others not so well. Imports are also more expensive but require fewer trips to garage and last longer, hence higher residual value. This makes it attractive to lease them (since they do not depreciate as much as domestic) - but if you plan to own it for a long time, it is better to have it financed. The monthly amount is higher, but the returns are more attractive.

0% APR is myth : If you pay 100% cash, the cost of same vehicle will drop $3000~$5000, but if you finance it with 0% APR, you pay 0 interest on an already inflated cost. But still it is better than bank finance, unless you have a lower rate LOC.

Bottom line, I would lease a domestic with higher residual value but finance an import (after having researched the model and company).

Good luck in your decision.

Hiren

OAC - The dealers want to sell cars. They will get you the credit approval even if you are a new immigrant! They will require some additional documentation like paystub, bank deposit statement etc. In the worst case, a guarantor.

Annual kms - If you drive 16-24K an year, makes all sense to lease (at least for me), as by the end of 4 years, the market value of the vehicle and the upcoming repair costs won't be attractive to still own it. Lease will allow to just return it. If the driving is less, you can buy it out and sell outside and make $.

Repair and maintenance / NA driving experience: Not sure how this makes a difference. Whether you own or lease, you are responsible for repair and maintenance.

Residual price: I never had a luck in getting that changed - different times, due to different needs, I had tried to bring them up and down. Both did not fly - I am always told it is determined by the manufacturer as a set % of the sale price. Dealers has this matrix available.

Another thing about financing is, they add the HST to the financed amount and you are paying interest on the whole vehicle price + HST. With lease, monthly payments are calculated (4 year amortization of sale price - residual price) and then HST is applied monthly. So the interest is paid on around 50% of the vehicle price. So even if the lease rate may be higher than the finance rate, the amount interest amount may not be much different.

Accident is another thing to consider. You bought a vehicle and it gets into accident (your fault or not), the car value drops significantly. If lease, you can just return!

Thanks a lot to all of you .
Today I bought used SUV . It is Jeep 2008 model . I got it @ 50% price of present model . Condition is good . It run below 60k upto now . And seller of this vehicle accepted to receive amount in 2 monthly installments .

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DSD

Congrats DSD.

Congrats !
How did the guy agree to accept 2 monthly installments? What was the security that you gave?
Peace

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I am a Gents and not a Ladies.

seller is friend of my friend and I gave him post dated cheques

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DSD