Tumbling_Dice

I have never been able to make leasing stack up against financing, even when I have been self-employed. However, if I were in the market for some of these upscale luxury cars with all the hi-tech, or a twin turbo engine, I would lease to try and avoid owning a money pit.

In NS, used cars, even recent ones, need looked at carefully by a mechanic for rust on the frame. If you get a good one, which I have managed to do it, rust coat every year and you are sorted.

scottabraham13

I've just sold a 9 year old car that's been through the Newfoundland winters. It was far from a rust bucket and passed it's inspection first time! There's certainly a healthy used car market here.

Atlantic Xpat

Yet I had a 9 year old vehicle that was beyond economical repair due to corrosion. There is a used car market here but IME, nearly new cars (<2 years old) are disproportionately expensive compared to elsewhere in Canada. In other words, you might as well buy new & take the financing offers than buy nearly new. I'm also a fan of leasing - not so that I can drive cars I can't afford, but rather we find it works for us in terms of vehicle/monthly payment/use & wanting to change a car before it starts costing more in servicing. YMMV in this as all things of course.

abner

I think a fairer way of describing leasing as a means of acquiring a car in Canada is:

• It is often very cost-effective, and cash-flow-effective, compared to buying *a new or nearly-new car* through a car-purchase loan. And, that's as true for mass-market brands as it is for premium brands, i.e it doesn't have to be an expensive car
• Some of the best leasing deals are offered by the car-manufacturers' finance divisions. Particularly near year-end, they'll often offer extra-low lease interest rates, that are effectively disguised discounts on the MSRP of the car.
• In my experience on both sides of the border in North America, it's often easier to qualify for credit, as a recent immigrant, from the car-maker's finance division than from one of the mainstream banks.

So in response to the OP question, it is indeed a quite-popular car-financing option in Canada, but again mostly in relation to new or nearly-new cars.

But, if you are comfortable with the process of buying and maintaining older cars instead, you'll save a great deal in depreciation cost. And, there are minimal further benefits of putting such a vehicle under a lease arrangement, unless you can directly write off vehicle operating expenses as well (e.g. as a small-business owner). So, leasing is a much less prevalent option in the used-vehicle market.

dbd33

Note that the tax breaks on leased cars for small business owners are pretty much a thing of the past. The days when I wrote off 100% of the leased business vehicle and paid 100% of the cost of the personal use vehicle (one being a fast car and one a moped) are long gone. Now you can only write off a proportion of a car worth tuppence happeny . You can't even write off the cost of drowning your sorrows over this iniquity.

Now only divorce can save one from the taxman.

abner

But surely you still write off vehicle expenses proportionate to actual business use of the vehicle, e.g. as an Uber car, or a delivery truck, or a salesperson's means of traveling from client to client (if that still happens anymore, in these Covid-blighted times).

The free lunch part might be gone, but legitimate business use is still tax-deductible.

dbd33

Technically, yes, but if we are talking about individuals operating as a professional service then, practically, no. A portion of a cheap vehicle mat be written off under tight conditions with which it is difficult to comply. Taking vehicular deductions leaves one at the whim of an auditor. If the business is a mobile hot dog stand then it's all fine but in the context of purchasing or leasing being a choice the business is likely something like computer consulting or mobile nursing which was once seen as a business deserving of tax breaks and is now seen as just gig economy work.

As you note, the whole matter is complicated by Covid, I should think it hard to claim a legitimate need to go anywhere for business now.

OrangeMango

I think the most sensible answer is "it depends where the car has been". And Canada is a big country. There are some areas of Canada where corrosion is happening easier and sooner than in other regions of Canada. Moisture and the usual saltmania are the usual causes.

What I noticed is that in Alberta or Saskatchewan one is better off, than anywhere in the Great Lakes region. However it often depends on the car, the driver, the mileage etc...

Atlantic Xpat

Try living on an island in the North Atlantic where we get a lot of snow and ice & the roads are salt licks from December through to April!

Shakyuk

A lot of actual Canadians do lease their cars, that is true but is it required - no. A lot of Canadians are absolutely up to the eyeballs in debt trying to keep up with the Joneses too, 30ft trailers, brand new trucks, all the toys and zero disposable income or safety net.

When I moved here I bought:
2011 Mitsubishi Outlander XLS 3.5V6 126000 km $10,000
2009 Mitsubishi Lancer 2.5 GT - 117000 km $6,500

Both cars are in good condition for their age. Sure if you want a 'nice' car that is new, then leases may be worth it, but even then I don't find them very competitive compared to what you could get in the UK. But for me it is the worst financial decision you could make,

abstractprojection

I've heard from car owners that the second hand market at-least in Vancouver is disappointing compared to the UK, however a lot of cars pass hands through the turnover of work-holiday visa types. Maybe try FB groups like Irish and New in Vancouver (I've found it more active then the British version).