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Monday to Friday: 9 am - 5 pm
Buy or lease a car?

Hello Nicolas,

We are about to buy a small car (I haven’t bought one since 1976!) And I would like to have your opinion.

As we walk to work, it is a car that we will use very little.

We chose a new car that sells for $ 20,935.00 plus tax.

We can pay it in full now or rent it at $ 297.00 per month for 4 years.

After 4 years we can buy it for $ 7,800 plus tax.

Our hesitation is especially that by renting, we have the advantage (?), after 4 years, to get rid of it if we are not satisfied or if we want another new one, or switch to electric!

What do you think?

Thank you so much,

A customer

Hello M. A customer,

Congratulations on your future vehicle purchase.

Buying or renting your vehicle is quite the same thing at the end of the day because sellers generally make a profit, regardless of the mode of purchase.

As you do not use the vehicle for your employment or your self-employment (or very little), I will ignore certain tax considerations which would then apply.

What can make the difference is the implicit interest rate that is included in the monthly rental payments.

This rate is generally low (0% or 0.9%), but it would be worth checking it to be sure.

If the implied rate is low, then it’s easy for you to rent because it allows you to change vehicles easily afterwards.

In addition, the money that you would use to buy the vehicle can be invested in investments that give a return instead of being “invested” in a vehicle that loses value over time.

Hope this answers your question.

Income splitting between spouses