Leasing 2 cars vs Financing 1. What’s cheaper? The truth will surprise you!

After a discussion with a close friend about his opinion on leasing a vehicle, I got to thinking about it and decided to tackle the mystery. The question was “Is it better to lease two cars or finance one?”. I went through all the differences and put them together. I think you’ll be surprised.

This comparison is based on an 8 year ownership period. It focuses on the differences between the two cars so certain things, like oil changes, aren’t listed. But things like servicing, fuel, and payments are.

Fine Print:The differences calculated is compared to Option 1. Insurance is based on maximum discount level in my area. Service prices are based on the manufacturer. Future resale value is approximate and based on current market.

 

Leasing vs Financing
2015 Civic LX CVT
Payments Lease 2 Cars Finance 1 Car Lease and Buy Out
Monthly Payment first 4 years $295 for 48 months $312 for 84 months $295 for 48 months
Monthly Payment next four years $281 for 48 months $262 over48 months
Total in Monthly Payments $27,648 $26,208 $26,736
Difference $0 -$1,440 -$912




Fuel Economy Lease 2 Cars Finance 1 Car Lease and Buy Out
Fuel Economy first 4 years (L/100km) 9.5/6.8/8.3 9.5/6.8/8.3 9.5/6.8/8.3
Fuel Economy next 4 years (L/100km) 7.9/6.1/7.1 9.5/6.8/8.3 9.5/6.8/8.3
Natural Resources Estimated Cost of fuel for first 4 years. $8,432 $8,432 $8,432
Natural Resources Estimated Cost of fuel for next 4 years $7,212 $8,432 $8,432
Total Fuel Cost for 8 years $15,644 $16,864 $16,864
Difference $0 $1,220 $1,220




Service Lease 2 Cars Finance 1 Car Lease and Buy Out
Brakes $450 $1,350 $1,350
Tires $1,600 $2,400 $2,400
Valve Adjustment and Spark Plugs $0 $422 $422
Coolant Change $0 $110 $110
Drive Belt $0 $150 $150
Miscellaneous Warrantied Not Covered Not Covered
Total $2,050 $4,432 $4,432
Difference $0 $2,382 $2,382




Insurance Lease 2 Cars Finance 1 Car Lease and Buy Out
Year 1 $2,128 $2,128 $2,128
Year 2 $2,099 $2,099 $2,099
Year 3 $2,069 $2,069 $2,069
Year 4 $2,040 $2,040 $2,040
Year 5 $2,128 $2,001 $2,001
Year 6 $2,099 $1,962 $1,962
Year 7 $2,069 $1,923 $1,923
Year 8 $2,040 $1,885 $1,885
Total Insurance $16,672 $16,107 $16,107
Difference $0 -$565 -$565




Pleasure Factor Lease 2 Cars Finance 1 Car Lease and Buy Out
Years 1-4 High High High
Years 4-8 Medium Medium-Low Medium-Low
Decision Yes No No




 Resale Value  Lease 2 Cars  Finance 1 Car  Lease and Buy Out
 $0  $7,000  $7,000




Costs Summary Lease 2 Cars Finance 1 Car Lease and Buy Out
Total Payments $27,648 $26,208 $26,736
Total Service $2,050 $4,432 $4,432
Total Fuel $15,644 $16,864 $16,864
Total Insurance $16,672 $16,107 $16,107
Resale Value $0 -$7,000 -$7,000
Total $62,014 $56,611 $57,139
Final Difference   -$5,403 -$4,875

What does this tell us? Based on just doing the regular maintenance, financing 1 car is $5403 cheaper than leasing two cars. But is that the whole story? Not at all. The unforeseen repairs of items like light bulbs, motor mounts, and electrical systems that may go wrong on older cars aren’t accounted for.  We also can’t monetize things such as the pleasure factor of owning a newer car with more convenience features and a quieter, tighter ride. Having any accident claim(s) on the financed vehicles will also lower the resale value which makes the final difference much closer. The $5403 is the best case scenario. A few accidents and some unexpected repairs and you’re a wash between the two.

And just to have some fun, the $5403 difference is broken down to only an extra $56/month, or $1.87/day. Who wouldn’t drive the nicer car for $1.87 a day?

Any questions? Leave a comment or get in touch here.

Ryan McVeigh

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