Leasing goods may make them more accessible than purchasing them. For example, your monthly payments are usually lower than if you finance your purchase through an extended payment plan.

The real cost of the lease

Take the time to evaluate the full cost, when all is said and done, of any goods you are thinking of leasing. Here's an example: a car would cost you $24,000 (taxes included) to purchase. To lease that vehicle, it would cost you $13,000 in total monthly payments over 4 years, and its residual value (the price to pay if you purchased the vehicle at the end of the lease) would be $10,000 plus taxes. Is leasing this vehicle to your advantage?

You should also ask yourself, when considering the total cost of the lease and your other financial obligations, whether you can afford this expense.

The What Is a Lease Contract with Purchase Option page provides more information on this subject.

Evaluating your ability to pay

The merchant who leases you the goods, or the person to whom the contract is assigned (if approved by the merchant), is required to evaluate your ability to pay. To do so, he or she must consider your income, your monthly housing expenses, your monthly payments in connection with other credit contracts, etc. Note that banks and financial service cooperatives fulfill take care of this evaluation requirement.

Even if a merchant agrees to lease you an item, it would be wise for you to evaluate your own ability to fulfill your obligations, such as making your payments. To do so, consider the total amount of the payments in connection with the lease contract as well as your other financial obligations.


Last update : February 4, 2020

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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.