GUIDE TO LEASING A LUXURY VEHICLE IN CANADA

Leasing a luxury vehicle can be an excellent way to enjoy the latest models without the long-term worries of ownership. A lease agreement allows drivers to essentially rent a vehicle for a pre-determined period while only paying for its depreciation and interest, as opposed to being responsible for the entire cost of the vehicle plus any applicable interest when buying the vehicle outright or financing its purchase. While those who purchase or finance ultimately own their vehicle, drivers who choose to lease enjoy a wide range of benefits including significantly lower payments, minimal maintenance requirements, and more.

However, some lease agreements offer more favourable terms than others, making it essential to fully understand your contract, your available benefits, and any potential fees before signing any paperwork. To help you better navigate the luxury vehicle leasing process, we’ll walk through key information for you to be aware of when signing an agreement.

HOW DOES LEASING A LUXURY VEHICLE WORK?

When drivers lease a luxury vehicle, they are allowed to drive that vehicle for the duration stated in their contract. However, they do not own the vehicle.

Throughout the lease term, the driver, known as the lessee, makes regular payments to the owner, known as the lessor. These payments cover the calculated depreciation of the vehicle throughout the lease term. As a result, lease payments are typically lower than their finance counterparts, which cover the entire value of the vehicle.

At the end of the lease term, which typically ranges from two to five years, the lessee returns the vehicle to the lessor and may choose to lease a new vehicle. Many lease agreements also provide lessees with the ability to purchase the vehicle at the end of their contract.

BENEFITS OF LEASING A LUXURY VEHICLE

Luxury vehicle drivers who opt for a lease agreement enjoy a wide range of benefits, including:

• Access the latest vehicles and advancements: Leases make it easier for drivers to frequently upgrade vehicles, providing them with access to the latest advancements in safety, performance, and technology.
• Update vehicle based on changing needs: Since leases allow drivers to select a new vehicle on a regular basis, drivers can frequently ensure that their vehicle meets their current needs. For example, a driver may choose a larger SUV if they need more space for a few years, then switch to a performance Sedan several years later.
• Avoid resale-related hassle: Drivers who prefer to drive the latest vehicle models often prefer leasing to purchasing, as they do not need to worry about the often tedious process of selling their current car when upgrading.
• Minimize maintenance and repair requirements: Leased vehicles are typically new models, so drivers can avoid the more intensive maintenance and repair requirements that are associated with older vehicles.
• Enjoy financial flexibility: Since monthly lease payments are typically lower than their finance payment counterparts, drivers can allocate more of their money towards investments or other financial priorities.
• Qualify for potential tax advantages: Business owners who lease a vehicle for work purposes may qualify for tax advantages.

FACTORS TO CONSIDER WHEN LEASING A LUXURY VEHICLE

While lease agreements offer drivers significant advantages, drivers must pay attention to their terms to ensure their agreement meets their specific needs. Key factors to consider before signing a lease include:

• Mileage allowances
• Wear-and-tear allowances
• Interest rates and payment amounts
• Lessee responsibilities and associated cost
• Lease-end options
• Warranty and additional benefits

MILEAGE ALLOWANCES

Lease payments are generally cheaper than finance payments since lessees are only responsible for the depreciation of the vehicle throughout the lease term. However, a vehicle’s depreciation is heavily influenced by its mileage. To account for this, lease agreements typically include an annual mileage allowance. Drivers can generally adjust their allowance before signing their lease agreement. However, if they exceed their allowance, they are typically subject to penalties since the vehicle would have depreciated faster than accounted for.

WEAR-AND-TEAR ALLOWANCES

Similarly to mileage, each lease agreement factors in a certain degree of depreciation due to wear and tear. However, if a vehicle is returned with a greater degree of wear than anticipated, its depreciation would be steeper than expected and the lessee would typically be subject to fees.

Lessors account for everyday use when creating wear-and-tear allowances. However, drivers prone to excessive wear can typically purchase lease-end protection to provide financial coverage in the event that they exceed their allowances.

INTEREST RATES AND PAYMENT AMOUNTS

Leases are typically advertised by the amount billed on a regular basis (for example, a weekly, biweekly, or monthly payment), or by a percentage rate that generally reflects the annual interest rate and any additional fees. Lease agreements that advertise the amount billed provide drivers with a better understanding of how much their new lease will cost and how it fits into their month-to-month expenses. Meanwhile, lease agreements that advertise the rate help drivers understand how much they will owe in addition to the vehicle’s depreciation. Ultimately, drivers should understand both elements prior to signing a lease agreement.

Drivers interested in a Genesis can use the Build and Order tool to customize their vehicle configuration and lease terms, then view their annual rate and monthly payment amount. Our One Price Promise ensures a single, consistent price for each vehicle configuration regardless of whether you prefer to shop online or at your local Genesis distributor.

LESSEE RESPONSIBILITIES AND ASSOCIATED COST

Drivers should always understand their responsibilities under a lease agreement, as well as how much time and money they may need to spend to meet these obligations.

Most notably, lessees are typically responsible for ensuring that their vehicle receives proper maintenance. Genesis lessees receive complimentary scheduled maintenance with at-home valet service and courtesy vehicle access¹, allowing them to meet all maintenance requirements with minimal lifestyle disruptions. However, most other luxury vehicle lessees must plan to take their vehicle in for maintenance and typically pay for any services rendered out of pocket. Drivers should take these extra responsibilities into consideration when evaluating their lease choices.

LEASE-END OPTIONS

At the end of a luxury vehicle lease, lessees typically return their vehicle to the lessor and sign a new lease agreement for a different vehicle. However, lease agreements typically outline additional options that are available to the lessee, such as purchasing the vehicle. Drivers should fully understand their lease-end choices.

WARRANTY AND ADDITIONAL BENEFITS

Lessees should be aware of all the benefits that their lease comes with, including the warranty and any special benefits offered by the lessor or manufacturer.

When evaluating the warranty of a vehicle ahead of its lease, confirm that it offers coverage for the entire duration of the lease period. Some luxury vehicle manufacturers offer lease terms that exceed their warranty coverage period (which is often limited to four years of coverage); if repairs are required once coverage has lapsed, the lessee generally must pay for them. Luxury drivers should be aware that Genesis vehicles come with a complimentary 5-year/100,000 km comprehensive limited warranty for added peace of mind and financial protection.

Drivers should also consider how any extra benefits offered by the lessor or manufacturer can improve their leasing experience. For example, Genesis has a 5-year care plan designed to elevate each driver’s experience at every step of their journey and comes included with all leases. Highlights include complimentary scheduled maintenance with at-home valet service and courtesy vehicle access, which allow drivers to meet all maintenance requirements with minimal disruption to their life. Additionally, Genesis Connected Services provides access to key connectivity features, including the ability to remotely lock a Genesis or have the vehicle call emergency services if the driver is unresponsive after a detected crash.¹

UNIQUE BENEFITS OF GENESIS LEASES

Genesis leases are designed to fit around drivers’ needs. Luxury drivers who choose to lease a Genesis experience a wide range of benefits, including:

• Access to the latest Genesis vehicles: Lessees experience the latest models, as well as our latest developments in performance, technology, safety, and design.
• Transparent pricing: All Genesis vehicles, including leased vehicles, are covered under our One Price Promise which guarantees a single consistent price for each vehicle configuration online and across all distributors.
• Financial protection: All Genesis leases include complimentary Guaranteed Asset Protection, which provides the lessee with financial protection in the event that their leased vehicle is deemed a write-off.² Drivers seeking additional coverage may explore Genesis Protection Plans.
• Flexible lease terms: Genesis leases are highly flexible. Drivers can select a lease term of up to 60 months, as well as an annual mileage allowance of up to 32,000 km. Additionally, lessees have multiple options when their lease term concludes, including the ability to purchase their vehicle, renew their lease, or return their vehicle.
• Complimentary scheduled maintenance with at-home valet and courtesy vehicle service: All Genesis leases come with complimentary scheduled maintenance, which allows leased vehicles to receive necessary maintenance without added expenses. Additionally, complimentary at-home valet and courtesy vehicle service is available within 50 km driving distance of a Genesis distributor, so lessees can have their vehicle serviced without disruption to their day.¹
• Extensive warranty coverage: All Genesis vehicles come with a wide range of warranties, providing valuable peace of mind throughout the lease period. Highlights include a 5-year/100,000 km comprehensive limited warranty, a 5-year/100,000 km Powertrain Protection warranty, and a 5-year/100,000 km Basic Emissions Coverage warranty.
• 24/7 enhanced roadside assistance: Genesis drivers receive 5 years of access to our 24/7 enhanced roadside assistance, which offers a wide range of services including flat tire changes, lockout assistance, battery boosting, and towing in Canada and the continental United States of America.
• Genesis Connected Services access: Genesis lessees can enjoy complimentary access to Genesis Connected Services for the duration of their lease term. Additionally, drivers who purchase their Genesis at the end of its lease can continue to access Genesis Connected Services for the lifetime of the vehicle.

LEASE YOUR PREFERRED GENESIS TODAY

Drivers interested in leasing a Genesis are invited to explore our current lease offers, or use our Build and Order tool to customize their ideal Genesis and receive a quote based on their preferred lease term duration and mileage allowance. Alternatively, drivers may choose to visit their local Genesis distributor to experience our lineup firsthand. Whichever path you choose, every Genesis lease includes a comprehensive suite of benefits, such as transparent pricing, flexible lease terms, and complimentary scheduled maintenance.