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When you are looking for a new car, there seem to be an endless number of financing options. These options can be confusing and sometimes even threatening.
Lease? Borrow? Interest Rates? Terms? Payments? Your dealer understands. This is why we offer the selected automotive dealers the Scotiabank Dealer Value Lease Plan ™ program, a comprehensive Lease Plan that doesn't leave you asking questions!
What is Leasing?
Leasing is a financing option that typically offers you a lower monthly payment than a traditional car loan. With a loan, your payments are based on the whole price of the car including taxes (less any down payment). With a lease, your payments are based only on the portion of the purchase price that relates to the term of the lease. At the end of the lease, you will only have had to pay the difference between the acquisition cost and a pre-determined resale value (Residual Value) plus interest. And rather than paying the GST and PST up front (and adding it to your car loan), you pay it as you go along on your monthly payment.
Who can Lease?
Under the Scotiabank Dealer Value Lease Plan program your dealer may make a lease available to all individuals and companies, on approved credit, who might otherwise finance the purchase of a new car or light truck for non-commercial use. Why Lease? With new vehicle prices continuing to rise, the way for many people to drive the car they deserve is to lease it. As many financial planners tell us, 'buy what appreciates; lease what depreciates.' Look at the monthly payment comparison (based on a loan rate of 8.75% p.a.).
| PURCHASE |
DEALER VALUE LEASE |
|
Price of car
|
$22,000.00
|
Price of Car |
$22,000.00
|
|
GST (@7%)
|
$1,540.00
|
Admin. Fee |
$350.00
|
|
PST (@8%)
|
$1,760.00
|
|
|
Total Price of Car
|
$25,300.00
|
Total Price of Car |
$22,350.00
|
|
Down Payment
|
$500.00
|
Down Payment |
$500.00
|
|
PURCHASE
|
DEALER LEASE VALUE |
| Net Price of Car |
$24,800.00
|
Net Price of Car |
$21,850.00
|
| |
Residual Value |
$7,500.00
|
| Term |
36 months
|
Term |
36 months
|
| |
Payment |
$505.84
|
| |
GST on Payment (@ 7%) |
$35.41
|
| |
PST on Payment (@ 8%) |
$40.47
|
| Monthly Payment |
$785.75
|
Monthly Payment |
$581.72
|
| Payment Difference |
|
$204.03
|
So your payments can be a lot lower when you lease instead of borrow. This means you can lease a car for less per month, or you can lease a better car for the same payment. You get more car for your dollar!
Note that if you borrow, when your loan is paid off, you have paid the entire cost of the car and you own it. With the lease, you have the option of purchasing the car for the Residual Value ($7,500) in the above example, or you can lease or buy a new one.
What do I pay up-front?
When you take delivery of the car, you pay your first monthly lease payment. You also make a security deposit equal to your monthly payment rounded up to the next $50 (minimum $250). Other than vehicle registration fees, that's it!
You can make a down payment or apply your trade-in towards the lease if you want to and this can make your monthly payments smaller. It's up to you.
What happens at the end of the Lease?
Well, you have choices and you don't need to decide now. When the lease expires, your dealer's lease allows you to simply return your car to the dealership¹, or you can buy it for the Residual Value. You decide at the end of the lease.
Some lease plans set higher Residual Values to reduce monthly payments and may also require you to buy the vehicle at the end of the term. Your dealer's lease uses a sensible Residual Value and, of course, you only buy the car if you want to.
¹Vehicle must be in satisfactory operating condition with no physical damage (reasonable wear and tear excepted). If vehicle has been driven more than a total of 24,000 km per year, there will be an excess mileage charge.
Where do I Lease?
At selected local dealerships. Just ask for Scotiabank's Dealer Value Lease Plan. The dealer's staff are fully trained to show you a comparison between a lease and a loan. They can take care of the details, whichever option you choose.
When do I Lease?
Lower monthly payments? What's the catch? Why doesn't everyone lease? Good Questions. Leasing isn't for everyone. If you drive an average amount (up to 24,000 km per year), take care of your car, and like the idea of a new car every two or three years, leasing may be for you.
If you drive a large number of kilometers each year and are hard on your car, and you prefer to keep it for a longer period of time, you may prefer traditional loan financing.
How do I Lease?
Just visit your select local dealer who takes advantage of the Scotiabank Dealer Value Lease Plan program. After you have chosen your car, light truck or van, they will work out the payments and look after all of the details involved in preparing the lease.
You owe it to yourself to check out your dealer's lease under the Scotiabank Dealer Value Lease Plan program before you make your purchase. It's a matter of dollars and sense!
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