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Feb 01, 2016
To Lease or Not to Lease!
Peter Scully has been experienced in vehicle leasing for over 45years and lends his personal insight to why consumers should at least consider leasing when considering how to finance a vehicle.

Jan 01, 2016
Welcome to a new way of buying a vehicle. A smarter approach. A new attitude. A friendly way of doing business. Save your time. Save your money. Come by often. Tell your friends. We know you will like it!

Nov 04, 2009
Where did it all begin...

Leasing Defined



Leasing has its own language, so we have provided a list of key terms to assist you. 

WHAT IS LEASING?                                                                 

Leasing is a way of obtaining a vehicle for a set period of time.  



IS LEASING FOR ME?                                                



The advantages of leasing are: 

  • a lower monthly payment than you would pay on a loan for the same vehicle
  • you pay tax only on the monthly payment rather than up front on the full price of the vehicle
  • the opportunity to drive a new vehicle more often
  • the comfort of knowing you vehicle is under warranty for the full duration in the case of the short term (2-3 years) lease
  • you have options at lease end (return the vehicle, buy the vehicle if you lease has a purchase option,  or let the leasing company sell it.)
  • you avoid tying up your money in a vehicle.

    The disadvantages of leasing are:  

  • the carrying cost is high if you keep your vehicle on lease for a long period of time
  • the lease can be costly if the lease is not based on  the number of kilometers you realistically expect to drive
  • you don't own the vehicle and do not build up "equity" with a lease as you do when you purchase a vehicle

    Leasing is not for everyone.  The least expensive way to obtain a vehicle is always to pay cash.  If you cannot pay cash then the shortest borrowing term available to you will result in the lowest interest cost or "carrying cost".  The faster you repay what you have borrowed, the lower your carrying costs.  Carrying costs for a lease are higher than with a loan of the same term because you are only paying off the depreciation, and not repaying the entire value of the vehicle. 


    1. Whether you lease or buy . . . you need to insure your vehicle.  

    In addition to insuring the vehicle, you must make sure that you have the amount of coverage required by your lease.  This may be more than if you buy your vehicle. 

    2. Whether you lease or buy . . . you are responsible for licensing and  registering your vehicle.  

    You are responsible for paying the license and vehicle registration fees during the term of the lease, just as if you bought the vehicle. 

    3. Whether you lease or buy . . . you are responsible for maintaining your vehicle.  

    Unless you have a lease that is a "full maintenance" lease, you are responsible for maintaining the vehicle according to the maintenance schedule set out in you Owner's Manual.

  •  If you lease . . . you are responsible for repairing the vehicle.  

    You will need to repair the vehicle as necessary.  If you do not properly repair the vehicle, you may be charged Excess Wear and Tear. 

    5. Whether you lease or buy . . . you are protected.  

    There is a Canadian Motor Vehicle Arbitration Plan (CAMVAP) 

    CAMVAP is a free arbitration program available to you from  participating manufacturers and leasing companies.  If you qualify for arbitration under CAMVAP, the program will help you deal with any disputes between you and the manufacturer that might arise concerning manufacturing defects in you vehicle.  Usually, the leasing company will work with the manufacturer to resolve your concerns.   (This program is not currently available in Quebec.) 


    You should know  

    1. There are different kinds of leases  

    Closed-End Leases:  

    In a Closed-End Lease, you make a set number of lease payments during the term of your lease and return the vehicle to the leasing company at the end of the lease term.  You are not required to make any  additional payments unless there is physical damage to the vehicle,  such as Excess Wear and Tear, or the number of kilometres you have driven is higher than the kilometre limit set out in the lease.  At the end of the lease, your options are: 

    • return the vehicle
    • buy the vehicle (if there is a purchase option)
    • lease a new vehicle

    Most manufacturer's leases are the close-end type. 

    Open-End Leases:  

    In an Open-End Lease, you make a set number of lease payments during the term of your lease and return the vehicle to the leasing company at the end of the lease term.  Then an adjustment will be made.  You will be required to make an additional payment covering the difference between the actual value of the vehicle at the end of the lease and the Residual Value stated on your lease contract.  However, if the value of the vehicle is more than the residual value stated on your lease, then you are entitled to the difference. 

    For example, if the residual value in your lease is $8,000,00, and the leasing company can only sell the vehicle for $7,500.00, you will have to pay $500.00.  If the vehicle is sold for $8,500.00, the leasing company will pay you $500.00. 

    2. There are payments required at the start of the lease  

    Refundable Security Deposit:  

    Most leases require you to pay a security deposit.  The Security deposit will be refunded at the end of your lease, unless it is used to pay for any remaining amounts that you owe. 

    First Lease Payment:  

    You may be required to pay the first lease payment. 

    Leased Vehicle Amount Reduction (Down Payment)  

    You can lower your monthly payment by trading in a vehicle or paying an amount in cash.  This is similar to a down payment on a loan.  On some leases, a significant down payment may be required. 

    License and Registration Fees:  

    You may be required to pay vehicle license and registration fees at the time the vehicle is delivered to you. 

    3. There may be an Acquisition Fee  

    If your lease contains an Acquisition Fee it increases the carrying costs of the lease and must be included in the Total Lease Charges. 

    4. Your lease may contain GAP Protection  

    If the vehicle is in an accident and is damaged beyond repair, GAP protection will cover the difference (the gap), after you pay the deductible, between what you owe on the remainder of your lease and the amount of your insurance settlement.  Many leases may include GAP protection but traditional vehicle loans usually do not. 

    5. You may not be allowed to remove the vehicle form the province or territory in which you leased it, without the prior permission of the leasing company.  

    Most leases state that you must obtain permission from the leasing company to take the vehicle out of your province or territory if you will be out of your province or territory for an extended period of time. 

    6. Your lease can be tailored to suit your driving needs.  

    With Closed-End Leases:  

    You can negotiate the number of kilometres that you will need at the time you enter into your lease agreement.  If you require additional kilometres it will increase your monthly payment.  If you drive more kilometres than you have agreed to, you will be required to pay an Excess Kilometer Charge.  You can usually "purchase" additional kilometres at the time you sign your lease at a lower cost than at the end of your lease term. 

    With Open-End Leases:  

    Open-end Leases normally have no kilometre restriction, however, the number of kilometres you drive will lower the market value of the vehicle at the end of the lease, increasing your costs at lease end


    1. Purchase Options.  

    You may choose to buy the vehicle if your lease contains a purchase option.  Some leases give you the option to purchase the vehicle at any time, while other leases give you the option to purchase the vehicle only at the end of the lease.   

    If your lease has an option to purchase the vehicle, the purchase option price must be clearly stated. 

    2. Right to Early Termination.  

    you will not be allowed to end your lease early unless it is stated on you lease.  If your lease contains this right, it should also contain the formula for calculating the early termination amount. 


    Acquisition Fee:  

    This fee covers the cost of preparing and servicing your lease.  If charged, this fee increases the carrying costs and must be included in the Total Lease Charges. 

    Amount to be Amortized:  

    This is the difference between the Net Leased Vehicle Amount and the Residual Value and represents the Depreciation that you pay over the term of your lease. 

    For example:  

    The Amount to be Amortized is calculated as follows: 

    Net Leased Vehicle Amount          $20,000  
    minus Residual Value                  -$12,000  
    equals Amount to be Amortized      $8,000 

    Annual Percentage Rate:  

    The Total Lease Charges expressed as an annual rate. 


    Default occurs when you fail to comply with any terms of the lease.  Your lease will set out specific circumstances which will result in your being in default. 


    This is the loss in the vehicle's value that occurs over time.  The longer you keep the vehicle, and the more you drive it, the more the vehicle will depreciate. 

    In your lease, the depreciation is referred to as the Amount to be Amortized. 

    Excess Kilometre Charge:  

    The cost you face if you drive your vehicle more kilometres than the maximum stated on your lease.  This charge is set out as a number of cents for each kilometre over the stated maximum, plus applicable taxes. 

    Excess Wear and Tear:  

    Every vehicle will experience normal wear and tear from every day use.  Excess wear and tear is over and above expected normal wear and tear.  Your lease should describe what excess wear and tear means. 

    Examples of excess wear and tear include: 

    • Bald or Mis-Matched Tires
    • Body Damage
    • Missing Parts or Interior Rips & Tears

    Lease Term:  

    This is the number of months that your lease will be in effect. 

    Leased Vehicle Amount:  

    This is the amount you and the leasing company agree on for the vehicle and any other items such as accessories, extra equipment, freight, applicable taxes (such as air conditioning tax) and pre-delivery inspection. 

    Monthly Provincial and Federal/Harmonized taxes are not included and will be listed separately. 

    Residual Value:  

    The Residual Value is, unless otherwise stated, the estimated wholesale Value of you vehicle at the end of your lease. 

    Total Lease Charges:  

    The Total Lease Charges are the total carrying costs you pay over the term of the lease.  This amount is similar to the cost of borrowing charges on a loan.  These charges represent a portion of your monthly lease payment,  the other portion is depreciation. 

    Canadian Vehicle Manufacturers Association
    Canadian Automobile Dealers Association
    Association of International Automobile Manufacturers of Canada
    Canadian Finance and Leasing Association


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