Has the thought of leasing a car ever crossed your mind? If you are staying in Canada, you ought to have given such a thought a quick consideration. Honestly, it is not easy moving around without a car, primarily if you reside in the busy Canadian cities.
You want to take any available chance of owning a car with the seriousness it deserves. The good news is that leasing a car is a viable option to own a car in Canada.
So, how does leasing a car work in Canada? Are there specific rules you should stick to when you want to lease a car? Let us find out below.
How to Effectively Lease a Car in Canada
To effectively secure a car through car leasing, you may want to know all the necessary car leasing options and available steps. Let’s start by looking at the options.
Some of the outstanding car leasing options you should consider are:
Standard Rental Leases
The ticket you need to get approved for standard rental leases is a worthy credit profile. Once your credit profile is approved, you will not have a problem driving out the brand new vehicles the dealership has on offer.
The dealership will need you to make a down payment followed by monthly payments for the remainder of your car lease terms. Upon expiration of your lease term, you will have to return the car and choose to either extend the lease or stop it altogether.
A lease takeover is when you take overpayment of the lease. There are several benefits to this option, including lower fees and upstart costs. You are also going to enjoy some cash incentives that are attached to taking over someone’s lease.
But all these don’t go without some negative side. Some of the risks include inheriting poor vehicle conditions and mileage overage, which you might not know about until the final stages of the lease if you fail to check the lease terms in advance.
Lease to Own Option
With this option, you have the opportunity to purchase a vehicle after the lease term has expired. You will have to make payments either weekly or bi-weekly, an amount that will not only help to cover your use of the vehicle but also help you accumulate equity.
To secure such a lease, you will need:
- Proof of identity
- Proof of residency
- Proof of citizenship
- Proof of income
- Proof of insurance
If you’ve not secured any proof of insurance, companies like Surex will help you get the most affordable insurance quotes in Halifax and other parts of Canada.
Option to Lease a Used Car
You can lease a used car when you’re in a lease-to-own agreement, and a customer wants to terminate their lease contract and hand it over to you to continue. With this agreement, you are likely to save on the down payment cost as that is already sorted.
But you have to trade with caution as you might be getting into a contract for a car that has damages or other mechanical issues. While it looks attractive and cheaper to go for a used car, you may end up paying more than the car’s actual cost.
Now that you have all the options to consider when leasing a car, how does leasing a car work? Let’s find out in the following steps.
Step 1: Confirm Your Credit Score
As you already know, you will need a positive credit score to get lease approval. On average, a score above 660 is considered acceptable, and you should confirm if you hit that before going for a lease.
Step 2: Come Up with a Budget
Although monthly payments for a lease may be lower, the associated costs and down payment might not. So, you will need to come up with a budget that will help you secure the down payment and cover the other costs.
Step 3: Have the Right Car in Mind
Is it a big family car you need? Or do you need a small business car? Whatever suits your needs should be on your mind right before setting foot at the dealership premises.
Step 4: Select the Best Dealership
Now that you know what car you want, you also need to find the best dealership with the best cars and terms.
Step 5: Book a Test Drive Session
It’s through a test drive that you’ll ascertain whether the car you want is up to the task or not. While the dealership might have the car you want, you’ll know if it’s comfortable or fits your driving style through a driving test.
Step 6: Go for Down Payment Option
You may not be asked to give a down payment, but you should suggest paying one for your good. An initial deposit increases your chances of getting approved as well as reducing your monthly payment.
Step 7: Go Through Your Lease Agreement
Once you have everything, the car, and the financial approval, you may want to go through the lease agreement. Look keenly on the monthly payments, duration of the term, and maintenance to cater to others.
Step 8: Start Paying
The only remaining thing after you secure your car is to start paying and diligently. If you maintain a positive payment record with the lease, your credit score eventually improves at the end of the payment period.
Step 9: Keep Routine Maintenance in Mind
Remember, this is a leased car, and you will have to return it at the end of the lease period. Failing to perform regular maintenance may cause some damages, which will cost you at the end of the lease period.
What does leasing a car mean? Since you have all the information on leasing a car in Canada, you’ll find the process easy. Before you opt for a lease, remember all the steps and options we’ve discussed. That way, you’ll be on the safer side of the deal.