In NT, what should I know about leasing vs financing for car loans?

In the Northwest Territories, the decision between leasing and financing a car loan significantly impacts your long-term financial picture and vehicle usage. Leasing typically offers lower monthly payments because you are essentially paying for the vehicle's depreciation over a set term, rather than its full purchase price. However, this comes with strict mileage limits, potential wear-and-tear charges, and you do not build equity in the vehicle, requiring a decision to return, buy out, or re-lease at the term's end. Financing, conversely, means you own the vehicle outright once the loan is paid, building equity over time and allowing unlimited mileage, customization, and the freedom to sell it at any point without penalty. The trade-off is generally higher monthly payments, as you are financing the entire purchase price, and you bear the full risk of depreciation and all maintenance costs post-warranty.

For 2025, with potentially higher interest rates across Canada, the total cost of financing could be more significant, while lease rates might also reflect these conditions but could be offset by manufacturer incentives to move inventory. In NT, only GST applies to the lease payments or the full financed amount, making the tax calculation straightforward compared to provinces with PST/HST. This matters because if you prefer predictable lower payments, drive fewer kilometers, and enjoy upgrading to a new vehicle every few years, leasing might align better with your lifestyle. If you value ownership, plan to keep the vehicle long-term, drive extensively, or want to customize it, financing is usually the better path for building an asset and maximizing flexibility.