You’re out to buy a car in Canada and suddenly you’re bombarded with multiple payment options you can't wrap your head around. You like a car and you pay for it, right? It may not be so simple here. A family member advises you about car loans. But at the same time, a friend boasts about leasing a new car that was apparently out of budget. You are left wondering how you’ll make the best decision when financing a new car.


As a newcomer in Canada, you’ll have plenty of budgetary concerns – living costs, travel, insurances etc. Before you set out to buy your first vehicle, ensure that you are financially ready. Make an affordable estimate for your car’s monthly expenditure including payments, insurance and maintenance costs. Paint a clear picture of your car needs and wants. Do hefty research regarding dealers. And finally, you need to understand the basic difference between financing options – finance/buy and lease.


You are buying a car when you opt for a car loan. This means that at the end of the loan payoff, you own the car. You can get loans through a dealer in which the dealer arranges for the loan through a lender. Or through any financial institution, where you directly deal with the lender.
Getting a car loan basically means that you borrow the entire purchase price from the lender. Then you pay back depending upon the agreed amount and conditions. Carefully consider the interest rate you are offered as this will directly impact how you pay back the loan. Shop around for the best deal. Zero- interest offers do exist!


Weekly, Bi-weekly or monthly payment terms are decided depending upon your financial feasibility. Down payment costs typically include registration fees and taxes.


With loan financing, you are the owner from day one. At the end of the payment period you have some equity and residual value.


When buying, the total expense and monthly payments are often higher compared to leasing. A warranty period is marked in the deal and once it has run out, you are responsible for all repairs and maintenance costs.


In leasing you are also borrowing money, but not the entire cost of the vehicle. Instead, you borrow a chunk of the amount that is estimated to decrease over the leasing period. Leasing is usually managed through dealers. The amount you end up paying is easily calculated as:

Lease amount = Selling price - Forecasted wear and tear (residual value)


There is no equity, because you don’t own the car unless you decide to buy it post-lease. There also may be penalties if you end the lease before contract ends. You may also be charged for surplus kilometers driven beyond the set limit, and based on the payment duration, you may end up paying more overall.
At the end of the day, the decision to go either way depends on your funds and requirements. You can rely on trusted online sources for buy/lease car calculators for real-time calculations. Just remember the golden words – Do your research!


Payments can be made on a monthly basis for the duration of three to five years and include interest, taxes, rent charges and fees. Down payment cost includes the first month's payment, registration fees, taxes, and a refundable security deposit.


Since you are paying only a portion of the entire purchase cost, leasing can give you low monthly payments. You have the option to walk away when the deal ends. Or you can upgrade to a newer model and experience the excitement of a new car all over again. There’s flexibility giving you the option of leasing a two to three year old used car. Such cars are practically brand new but with a huge price deduction. In some cases there may be warrantee coverage too.


Financing comparison chart




New, used or certified pre-owned




Three options ranging from 16,000 to 25,000 kilometres per year


Variety of terms

Variety of Terms


No kilometre limitations; complete freedom to customer your vehicle

Attractive payments and terms; customizable kilometre options; lease-end flexibility; a new vehicle more often


You own the vehicle free and clear after your financial obligations are met. It will be yours to keep or trade-in on your next vehicle.

You pay to use the vehicle during the term of the lease and must return it at lease-end unless you choose to purchase the vehicle.


Monthly loan payments may be higher than comparable term monthly lease payments because you pay for the entire purchase price of the vehicle. Each payment helps build vehicle equity toward future trade-in. A bi-weekly payment schedule is also available if you prefer a lower payment every two weeks.

Monthly lease payments may be lower than comparable term monthly finance payments because you are paying for the portion of the vehicle’s value used during the lease term. A bi-weekly payment schedule is also available if you prefer a lower payment every two weeks.


Customize your vehicle at any time.

Customize your vehicle through your Dealer at the beginning of your lease with approved accessories.


There are no charges for vehicle wear and tear. Excessive wear will lower the vehicle’s trade-in or resale value.

A normal amount of wear and tear is covered. You are responsible for wear and tear in excess of normal limits unless you choose to purchase the vehicle.


At the end of the loan, you own the vehicle. It is yours to keep or trade-in on your next vehicle

At the end of the lease, you have the flexibility to either purchase your leased vehicle at a predetermined price or return it.

Let’s Get Started

Applying online at for credit is convenient and secure, and you’ll get your credit decision right away. You can use this information when you go to your dealer.

What are the minimum application requirements*?

• You are of the age of majority in your province or territory of residence

• You have sufficient income to pay for the vehicle for which you are applying and all related expenses

• You do not have current delinquent accounts, repossessions, foreclosures or bankruptcies

• Contact your local dealer for additional eligibility requirements

* Requirements subject to change at Ford Credit’s discretion.

Check out the Newcomer Program booklet.