Leasing Basics

Red Carpet Lease Info

The decision whether to buy or lease your vehicle usually depends on your personal preferences and the specifics of your financial situation.  Using Traditional financing to purchase your vehicle will cause monthly payments to be based on the entire value of the vehicle.  It also means you will own the vehicle at the end of your financing term.  There are a lot of benefits to both buying and leasing a vehicle.  Once you know the differences, you will be able to make an informed decision as to which way suit you the best.

Comparisons between Leasing and purchase financing:

Whether you are buying or leasing, first you need to select a vehicle, and agree on a selling price.

When leasing, you pay only for the portion of a vehicle you expect to use during your specified lease term.  We can determine how much your Ford will be worth down the road, at a specified time.  We use such factors as the model, equipment and the number of anticipated kms to determine this future value.  This future value is subtracted from your selling price, and you are paying on the difference. As with conventional financing there are interest charges and taxes, that also factor into your monthly payment. 

For example, if you lease a $20,000 vehicle, and that vehicle's estimated worth at the end of your lease is about $9,000 (lease-end value), your resulting monthly payments will be based on the $11,000 difference

Conventional finance terms these days are typically 4 to 6 years, while lease terms tend to be 2 to 4 years. Since many people are not keeping their vehicles for 6 years, why should they be paying for that long? With a lease you are paying for the portion of the vehicle's life that you are actually going to be driving it.

What you get with:

*When you buy a vehicle you take the risk as to the resale or trade in value for down the road.  While when you lease, Ford Motor company guarantees the lease-end value of the vehicle (based on it being in acceptable conditions under the guildlines with specified kms).  This way Ford Motor Company is taking the risk of resale, not the customer.

**According to Canadian Automobile Association (CAA) research from 2002 Driving Costs brochure.  Average cost of repairs is between $120-$150 per month.  It will continuously increase as the vehicle grows older.  With most of our lease terms you are under warranty and driving during the least expensive portion of the vehicle's life (the gas and go phrase).  You are only responsible for changing oil and filter and rotating your tires.

***  5% G.S.T. applied on both transaction methods.  When you buy the vehicle, 5% tax will be financed with interest, i.e. You will pay interest on the tax you pay.  While when you lease, G.S.T. will be calculated on the money you spend.

At the time to trade, Resale Risk (conventional finance) Vs No-Resale Risk (Red Carpet Lease)

Lease-End Options:

At the completion of your lease obligation, you will have 3 great options all based on your pre-determined lease-end value.  They are,

• Purchase or lease a new vehilce - after fulfilling your lease obligations, qualified customers can purchase or lease a new Ford, Lincoln or Mercury.
  
• Purchase your current vehicle - the price is stated in the Purchase Option section of your Lease Agreement.
  
• Return your current lease vehicle and walk away(i) - when the price stated in the Purchase Option section is higher than the current market value.

(i) The vehicle is subjected to a lease-end inspection done by a 3rd party inspection company for excess wear-and-tear and mileage. A copy of the Ford Credit Wear & Tear Guildlines is available upon request. l.chui@metroford.ca

Leasing and High km Usage

Many customers - especially business and sales people - believe that leasing and high km do not mix.  This is a common misconception.

Whether you purchase a vehicle or lease it, there is always a price to pay for high km.  With Ford Credit Red Carpet Lease, you will have the advantage of knowing what high km will cost in terms of added depreciation- an unknown factor until you are ready to sell or trade in your vehicle.  The real cost of high km when you purchase a vehicle can be highly speculative.

If you are a high km driver contact us for a no obligation quote as to how leasing might work to your advantage.

Advance Payment program (APP)

If you like the idea of driving a new vehicle every few years while also eliminating the inconvenience of monthly payments, APP might be right for you.

The advantages of APP include:

• All the benefits of regular Red Carpet Lease
• One single payment
• Lower out-of-pocket costs than most RCL leases
• No monthly bills
• No resale or trade-in complications
• RCL contracts can be arranged right at Metro Ford