tyrian

Hello,

I land in Toronto on 2nd July, make my way to Waterloo on the same day, and start work a few days afterwards.

One part of my Canadian adventure I haven't full looked at is transport. I'll be renting a car for the first month, but after I don't know whether I should buy or lease a car.

Leasing appeals to me because I don't have to make a big financial commitment immediately, but is it viable for a new immigrant on a TWP?

Any other suggestions?

Tyrian

dbd33

Leasing, especially taking over someone else's lease, makes a lot of sense as it gets you wheels for a couple of years with the minimum commitment. If you find that the vehicle is just too dull/juicy/cramped/gutless orr you'd rather have a house and a bike then at least the end is in sight. Have a look at http://www.leasebusters.com/en/default.asp

G77

Hmmm, I was just going to buy something when I got there, but this looks interesting..... Do they still do the same sort of credit checks when taking over someone's lease? i.e. you won't have any history as a new immigrant...

Mikey B

Yes u still have to go through a std credit app when laking a lease over from the likes of leasebusters.ca but my advice is suck it and see, I managed to get one after living here a year through ford so maybe you will too only the paper pushers know.

Oakvillian

If one dealer isn't prepared to write a lease for a new immigrant on TWP, find another dealer. even Leasebusters is only one of several end-of-lease specialists.

If you're renting for a month first, you'll have time to shop around main dealers too, to see what takes your fancy. There have been quite a few threads on here in the past with tales of how shopping around between dealers will bring out the finance offers. I'm one of several who took a lease with a longer term than the duration of my initial TWP, so don't let a dealer convince you it's not possible!

G77

What's the advantage of a lease over buying outright? I was thinking of getting something that's probably just come off lease and spending around $12K (probably on a minivan, much to my distaste, but that's another matter).

Oakvillian

pros and cons in both directions, but it was suggested to me that a lease-financed car is a quick and relatively painless way of building a credit history which may come in useful later.

dbd33

Leasing gets you a newer, better, vehicle for the same payment but, at the end, you have nothing to show for the money spent and you have to be careful not to go over the allowed mileage (not that I've ever been within it).
If you're self employed there may be tax advantages to leasing.

Generally, if you're going to keep the vehicle long term, buy it. If you know you'll want "new and shiny" again in three years lease it. If you don't know what you want, perhaps because you're new to the country, lease short term - keep the payment down by taking over an existing lease.

Surrey Expat

From a business perspective there is not much difference in tax advantages between leasing and a capital purchase. Lease payments are deductible in the year they occur, whereas a purchase is capitalised. Leasing saves handing over large amounts of cash,

From a personal perspective, leasing is the most expensive way of owning a vehicle. Until the days of low interest, financing was how the big car companies made most of their money. When the term is up you just walk away, whereas with a purchase you have to sell the vehicle. Leasing in general helps car dealers sell people more than they can really afford.

Deciding which way to go is a personal choice, if you don't have the cash, but have cash flow, then leasing might be an easy option. If you have surplus cash, then purchasing would be the way to go. Why not buy an older used car and get rid of it after a couple of years? Way lower cost of ownership Get a CAA check done on a used vehicle so you don't get saddled with a pile of junk.

Leasing has mileage limitations & condition requirements for return. You can pre purchase extra miles, but if you don't use them you don't get the money back.

There are way easier ways to build up credit history, get store cards, low limit credit cards and pay them off regularly, utility bill, cell phones etc. Credit alone is not enough to build up a history, you need credit from companies that report to the credit bureaus, which most of the big ones do, as do banks.

cneldred

We lease a car through GMAC. It was arranged within a week of landing. They use Equifax over here, but UK doesn't come under their Equifax report. Therefore i presented a copy of the UK one which was 10 days old, proof of employment and earnings, and that seemed to be enough to get everything put through smoothly.

The biggest pluses for me for leasing is at the end of the contract it is nice and easy to get rid of i don't have to advertise it and and have a load of timewasters come to see it or get a lousy price from a dealer. Also it all helps towards my Canadian Credit score.

Chris

Bill_S

What he said...

But let me stress - be VERY careful about the mileage allowance on a lease. Depending on your lifestyle in Canada vs the UK, you could be driving significantly more in Canada, and easily exceed the limit of the lease. If you go over, the charges will add up very quickly. DBD was fortunate not to have this problem, but it comes as a nasty surprise to a lot of first-time leasers.

dbd33

The problem with going over is not so much that you have to pay the penalty as that, in order to avoid it, you end up having to take another vehicle from the same manufacturer. I suppose I've had twenty or so leased cars none of which were returned within the allowed mileage, in most case the dealer has forgiven the excess (as well as scratches and dents) when I've taken another car of the same type but charged for it all when I've wanted to walk away. Only Ford forgave the whole lot despite my turning in the car and going home by bus.

G77

Bet that was a first?

JAJ

You should be looking at the total cost of ownership, not just one element.

dbd33

Oh good grief no, a combination of usually living in the city and spectacular financial ups and downs (directly related it must be said to my physical ups and downs) has meant periods of years of getting around by TTC while providing "a SUV type vehicle with leather seats". It's only in the good years for tax avoidance that I've had a car or cars for my own use.

Turning in the Mustang, one of the better Mustangs, and riding home on the bus was one of those moments when I wondered if perhaps I should have taken the first lawyer's advice.