Lease Cars: Understand Why People Do it?

Car Leasing isn't a new stuff. It has been around for decades (you will be surprised to know that in the 50's cars could be leased). So, what is the thing about it? Why so many people lease cars?

If you are new to this concept, then I will explain to you why so many people decide to lease cars instead of buying these.

Seven over 10 Clients at a Dealer Lease Cars

In previous articles, I've talked about the actual benefits of Car leasing and more specifically of the particularities of doing so in Canada. Car Leasing allows paying the same amount of money for better and more practical vehicles.

Of course, there are deals and deals. There are many ways of leasing a car, as same as buying a new one and a used one. I've been helping people to understand the process for a long time, and I would always suggest you document yourself and learn how to get a good deal.

I've interviewed dealers in Canada and the U.S. and around 70% of the clients who arrive into a dealer looking for leasing a car and not just because they want to spend money: People lease cars because it is accessible to anyone, it is the less risky option, and people love to drive good cars.

Car Leasing Is Available to Anyone

Bad Credit, Good Credit... of course it has an impact, but it is also a car leaving a parking lot, so dealers will find a way to give you an option. In Canada, you just need to be a permanent resident (as you will be literally renting a car) so it is not available for you as a tourist, even if you come for a long time.

An alternative commonly used is that parents do three years term lease for their son/daughters as soon as these start working to help them jumpstart into work-life until an independent financial status is reached. On these cases, it is affordable, practical and the period is very flexible. All of that, plus the fact that parents feel better knowing they are driving safe vehicles that are covered by the manufacturer warranty for the next few years.

If you are new to leasing, I suggest you take a look at my article where I explain how the Car Leasing process works.

Less Risky Option

And this is where New Cars definitely overcome used ones: the risks related to your transportation needs are way more reduced with new cars than with used ones

  • Less chance to get a mechanic problem.
  • Manufacturer warranty for repairs in case of defects.
  • Overall safer than previous models.
  • More "know how" applied to it.
  • More mechanical parts available in case of repairs.
  • Courtesy car from the dealer in case of repairs.
  • Towing is generally included.

Of course, everything isn't straightforward as for new cars you have to:

  • Pay more than for used ones
  • Pay more insurance.
  • Pay less when leasing than when buying

If you are a person concerned with the fact that your transportation needs should be as less risky as possible, as most people out there, then for sure you can lease cars and reduce the risk to a minimum.

Luxury Manufacturers Lease Even More

Of course, the more expensive the vehicle, the harder to sell, so leasing shows up as an alternative to make these go away from the parking lot (still at huge prices). Leasing makes possible that BMW, Audi, and Mercedes-Benz, just to mention a few, can handle to introduce into the market vehicles that are above the 50,000CAD. They just lease these, and people who like those cars, but cannot afford to acquire the "entire" car completely, then just lease the "part" of the cars they will use.

See the following example:

The Audi A4, when leased for 36 months, costs the same as if it were financed during 72 months. The clear benefit is that with the same amount of money, you can drive a new Audi every three years and be fully covered by the manufacturer warranty.

Lease Cars: Understand Why People Do it?

The Audi A4 is the most popular luxury vehicle in Canada.

Just Explore what leasing costs

At LeaseCosts we have listed more than 1,000+ different base lease offers you can use to explore the market. Just take a look and see what does leasing actually costs.

About the author

Jorge Diaz is a passionate car lover, winter driver & Software Engineer. For the last 10 years, he has built Online Solutions used by more than 5,000 companies across the globe. He founded LeaseCosts in 2016 with the purpose of simplifying and helping Canadians to better understand the complex market of car leasing in Canada. You can connect with Jorge at Leantrepreneurship.com or send him a direct message.