• Potential advantages you may not have considered
• Is leasing right for you?
• Leasing is easy
• Leasing FAQ
• The language of leasing

More and more people are discovering the advantages of leasing. It’s certainly no mystery. Leasing can offer convenience and genuine financial benefits - because you pay only for the portion of the car’s value you use.

Lower Initial Costs:

With leasing, your initial cash outlay is usually much less than the down payment required to finance the purchase of a vehicle.

When you purchase a vehicle, you’ll be asked to pay or finance the Goods and Service Tax (GST) and Provincial Sales Tax (PST) that become due on delivery of your vehicle. The full charge for GST and PST are not due at inception of a lease. GST and PST are included in your monthly payment, saving you an initial cash outlay, with the potential of tax savings in the long run.

Lower Monthly Payments:

Your monthly lease payments can be significantly less than the retail finance payment for the same vehicle. That’s because you pay only for the portion of the vehicle’s value you use during your lease period, plus a monthly leasing fee. Retail payments are usually higher for the same term, because they’re based on the total value of the vehicle (including all taxes). This will be explained in more detail later.

Financial Flexibility:

With the lower initial costs and monthly payments a Mazda Personal Lease can offer, you’ll keep more of your disposable cash, making it available for other expenditures or investment opportunities. You’ll also conserve your borrowing power. With no large debt outstanding, your full credit remains available.

Purchase Option:

At the end of your lease, most often, you have the option of purchasing your vehicle at a pre-agreed price. You also may have the option of returning the vehicle and leasing another one. Or, you can simply return the vehicle and walk away. It’s your choice!

Convenience And Control:

Leasing helps more people to drive a more luxurious vehicle more often, because the initial cash outlay and monthly payments are usually less than the retail payment for the same vehicle. And because your vehicle usually has a guaranteed lease-end value, a lease eliminates any problems associated with selling or trading a used vehicle.

With all the advantages leasing provides, there’s no doubt that it’s an attractive alternative to the rising costs of vehicle ownership.

The important thing to remember when you consider leasing your next vehicle is that leasing is an excellent alternative to buying. Determine the needs of your lifestyle. You may want to take leasing into account if one of the following situations applies:

• You usually trade your vehicle before it’s paid off
• You replace your vehicle immediately after you’ve paid it off
• Driving a new vehicle every two to four years is something you enjoy and appreciate
• You drive more than average kilometers each year.

Leasing Fits Many Lifestyles:

Is leasing right for you? That’s something only you can determine.

A lease can help you drive a more luxurious vehicle for the same amount of money as if you’d purchased it. How?

• You have greater financial flexibility with lower monthly payments
• Leasing may offer potential tax benefits for leased vehicles used for business purposes
• When you lease, you can usually drive a new car more often
• Leasing provides the convenience and dependability of a newer vehicle that is almost always under warranty, saving you the expense of repairs

Kilometers And Your Lease:

Many people believe that leasing and high kilometer drivers just don’t mix. But surprisingly, a lease can actually become more cost-effective the more kilometers you drive.

It’s easy to add a greater kilometer allowance to your lease up front. A kilometer adjustment also reduces your Purchase Option price, which is a real advantage if you decide to purchase the vehicle at lease-end. And if you decide not to purchase your vehicle, any unused prepaid kilometers are usually refunded to you.

After you’ve picked out the vehicle that’s right for you, carefully review the lease terms and agreement with your dealer so that you understand all your leasing obligations. Here are some key points to consider:

• Lease Term. A lease will allow you to select a lease term that fits your needs. Most leasing companies offer terms from 24 to 60 months, or any term in between. Flexible leasing terms help you customize your lease for your specific driving habits, as well as the monthly payment you want to make.
• Initial Cash Outlay. Your first month’s lease payment, all applicable license and title fees and a refundable security deposit are due at lease signing. In addition to this, many leases require an initial down payment. The amount of the down payment varies from no money on up. Of course, the higher the down paymen, the lower your monthly lease payments will be. Since sales taxes are included in your monthly payment amount, your overall monthly costs will be less than comparable retail purchase where all sales taxes must be paid at the time of sale.
• Built-in "Gap" Protection. Many leases provide added peace of mind through built-in "gap" protection. If your leased vehicle is wrecked and declared a total loss, or stolen, your lease may be structured to cover the difference or "gap" between your insurance cheque and your lease payoff amount. All you’re responsible for is your insurance deductible and any past-due amounts. Ask your dealer for details.
• Excessive Kilometer Fees. High kilometers always affect the value of a vehicle. With a retail purchase, the dollar deduction of high kilometers is an unknown risk until you want to trade or sell your vehicle. The varying effects of high kilometers are easier to predict when you lease your vehicle. Most leases have a base amount, say 25,000 kilometers per year, built into the contract at no additional cost. However, if you’re a high-kilometer driver and need more than the standard kilometers allowed in your lease contract, the adjustment is easy to make. Just let your dealer know, and additional kilometers are simply added into your contract at the time you lease your vehicle. Although your monthly payment will increase, the adjustment strictly covers the extra kilometers. Excess kilometer allowances  also lower the Purchase Option price of your vehicle, which is a real advantage if you decide to purchase your vehicle at lease end. Best of all, if you don’t use all of your prepaid extra kilometers, and you don’t purchase the vehicle at the end of your lease, you’ll probably be entitled to a refund. End-of-lease kilometers greater than the allowance stated in your lease terms, which were not included in your Lease Agreement, are subject to an "excessive kilometer" adjustment.
• "Normal" Wear and Tear. Even the most well-kept, pampered vehicle will accumulate its share of wear and age-related damage as it’s used. "Normal" wear and tear, or what can be expected to occur as a vehicle ages, includes minor types of damage and wear such as: small parking lot dents and dings; minor, inconspicuous scratches; small chips in the paint finish which may be caused by flying stones or other road debris; reduced tread on tires.
• Excessive Wear and Tear. Unusual wear and tear, exceeding what can normally be expected to occur as a vehicle ages, is subject to an excess-wear-and-tear charge. Excess-wear-and-tear charges can be avoided if you have repairs completed prior to returning your vehicle. For more information about what is considered "excess wear and tear," contact your dealer.
• Refundable Security Deposit. The deposit, due at lease signing, will be refunded at the end of your lease, provided there are no excessive kilometre or wear-and-tear charges, unpaid monthly payments or other charges due.

It’s easy to see there s nothing mysterious about leasing. Once you understand the facts, it’s as straight-forward as traditional financing. In many cases, leasing can help you afford a more luxurious vehicle more often, with little or no down payment, and lower monthly payments than traditional financing. The financial advantages of leasing can be significant.

• Since I've always owned my vehicles, how does leasing affect equity?
• What happens to the equity I have in my current vehicle if I decide to lease?
• Isn't leasing more expensive than buying?
• Can I trade my car before my lease term is scheduled to end?
• Can I get a better vehicle by leasing for the same monthly payment amount I’m currently paying to purchase my vehicle?
• Are there any tax advantages to leasing?
• What happens at the end of my lease?
• Can I purchase my car before my lease term is scheduled to end?

1. Since I’ve always owned my vehicles, how does leasing affect equity?

One of the reasons lease payments can be much lower than payments to purchase the same vehicle is that monthly lease payments are only for the use of the vehicle during the term of your lease. Lease payments do not include equity. When your lease ends, if you decide to lease again, you’ll owe only the initial cash outlay of your first month’s lease payment, applicable license and title fees, and a refundable security deposit. No equity is necessary.

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2. What happens to the equity I have in my current vehicle if I decide to lease?

1. If you have equity in your current vehicle, you have four great options:
2. You can keep your old vehicle;You can sell your vehicle yourself and keep the proceeds;
3. You can sell your vehicle to the dealership and keep the proceeds;
4. You can sell or trade your old vehicle to the dealership and use the proceeds to reduce your monthly lease payments on your new vehicle.

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3. Isn't leasing more expensive than buying?

With a lease, your initial cash outlay is usually less than the cash investment required to purchase a vehicle, and your monthly lease payment is also usually less than a conventional retail loan payment. A lease offers more affordable payments and leaves you with more disposable cash that you can put to work with other purchases or investment opportunities.

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4. Can I trade my car before my lease term is scheduled to end?

Yes. But terminating your lease early, that is, "trading in" your leased vehicle, has the same market risks as with a purchased vehicle. Before you lease, talk with your dealer about a lease term that will best match your driving habits and lifestyle needs. Careful planning can help you avoid the potential added expense of early lease termination.

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5. Can I get a better vehicle by leasing for the same monthly payment amount I’m currently paying to purchase my vehicle?

A lease has the potential to put you into a vehicle with more luxurious options than you might be able to afford with a retail payment. It all depends on the monthly payment that’s right for you. Consult your dealer for details.

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6. Are there any tax advantages to leasing?

There can be tax advantages to leasing, depending on your individual circumstances. If you use your leased vehicle for business purposes, the lease payment, or a portion of it, may be deductible as a business expense. The potential tax benefits of leasing versus purchasing are so dependent on your individual circumstances that, if you’re concerned about tax benefits, consult your tax advisor before you make a vehicle leasing decision.

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7. What happens at the end of my lease?

There are no hidden charges or surprises at the end of your lease. The disclosure laws for leasing in British Columbia are the most comprehensive in Canada and every attempt has been made to structure the lease in plain language. You know right from the start exactly how much your monthly payments are, and what types of fees will be assessed for excessive kilometers or unusual wear and tear. If you’ve maintained your vehicle properly throughout the term of your lease, you have three options:

• Return the vehicle and walk away after settling any charges for excessive wear and tear or excessive kilometers that may have been incurred during the course of your lease
• Turn the vehicle in and lease a new one
• Purchase your vehicle at the pre-agreed Purchase Option price stated in your lease

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8. Can I purchase my car before my lease term is scheduled to end?

In order to purchase your vehicle prior to lease end, you will have to negotiate an early termination with your dealer. The dealer will usually have to arrange to purchase the lease from the leasing company and sell the vehicle to you as a used car. You will be responsible for all fees and taxes associated with the transaction. Before you lease, talk with your dealer about a lease term that will best match your driving habits and lifestyle needs. Careful planning can help you avoid the potential added expense of early termination.

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Capitalized Cost

The agreed-upon price of the vehicle.

Capitalized Cost Reduction

Any up-front or down payment that reduces the capitalized cost of the vehicle, thereby reducing monthly payments. The lessee may also apply the trade-in value of a vehicle in place of, or in addition to, this payment.

Closed-End Lease

A lease that stipulates the lessee is not responsible for the market value of the vehicle when the lease term ends. Also called a "walk-away lease," it enables the lessee to either return the vehicle to the dealer (assuming all lease terms have been met) and "walk away," or buy the vehicle for the Purchase Option price stated in the Lease Agreement.

Depreciation

The difference between the vehicle’s net capitalized cost and its residual value.

Early Termination

Ending the lease before the scheduled date of termination which is stated in the Lease Agreement.

Excessive Kilometer Fee

A charge incurred by the lessee at lease-end if the vehicle has accumulated kilometers in excess of the kilometer allowance stated in the Lease Agreement.

Excessive Wear and Tear Charges

A charge to the lessee at lease-end for unusual wear and tear, exceeding what can normally be expected to occur as a vehicle ages.

"Gap" Protection

An added feature of some leases that automatically covers the difference or "gap" between your insurance settlement and lease payoff amount if your leased vehicle is wrecked and declared a total loss, or stolen. All you’re responsible for is your insurance deductible and any past-due amounts.

Guaranteed Future Value

The agreed-upon anticipated market value of the leased vehicle at the end of the lease. This value varies according to lease term, kilometers allowance and the vehicle’s make and model. The value is established at lease signing and stated in the Lease Agreement.

Lease

A contract for the use of a vehicle for a specified time period at a specified payment amount.

Lease-End Value (Residual Value)

The agreed-upon anticipated market value of the leased vehicle at the end of the lease. This value varies according to lease term, kilometer allowance and the vehicle’s make and model. The value is established at lease signing and stated in the Lease Agreement.

Lease Term

The number of months a lease is in effect.

Lessee

The customer who leases a vehicle.

Lessor

The party who owns the vehicle (usually the dealer) and agrees to allow the lessee the use of the vehicle under the terms of the Lease Agreement.

Manufacturer’s Suggested Retail Price (MSRP)

The retail price of the vehicle as established and listed by the manufacturer.

Purchase Option/Purchase Option Price

The Purchase Option price is agreed on between you and your dealer at the time you sign your lease. This is the price at which you can purchase the vehicle if you decide to exercise your Purchase Option at the end of your lease.

Residual Value (Lease-end Value)

The agreed-upon anticipated market value of the leased vehicle at the end of the lease. This value varies according to lease term, kilometre allowance, and the vehicle’s make and model. The value is established at lease signing and is stated in the Lease Agreement.

Security Deposit

An amount used to offset possible costs associated with excessive wear and tear, excessive kilometers, or unpaid lease charges at lease-end, where applicable. After applying the security deposit to any amounts owed by the lessee at lease end, any remaining deposit is refunded to the lessee.

Term

The number of months a lease is scheduled to run.