Leasing: Everything You Need to Know

About Leasing

With a lease1, payments may be lower than purchasing the same vehicle, since you only pay for the portion of the vehicle you use over the term of the lease. You can consider vehicles that have more options; trade in your vehicle for the latest model more frequently; and, align the lease term to the vehicle warranty period for greater peace of mind. Find all of your questions and answers about leasing from Ontario Motor Sales here.

 

Select one of the following to learn more:


 

Why Lease?

What are the general lease parameters?

  • Available Lease terms by model are specified by GM Canada
  • Maximum contracted kilometres cannot exceed 168,000km
  • Maximum down payment cannot exceed the difference between the Amount Financed and the Residual Value
  • Residuals (Option to Purchase) are based on annual kilometres of 24,000. There is a Low km option of 20,000km
  • Pre-purchased Kilometres cannot exceed a value that would drive the residual value below 10% of the Vehicle's MSRP
  • Leased units must be registered in Canada
  • New Vehicles - Current calendar year brand new automobiles not previously registered with less than 800km at delivery. Demo's may also be leased providing kilometres are not greater than 20,000km 

Lessee2  Eligibility

  • Must have reached the age of majority for the jurisdiction of the Lease
  • Must be a Canadian Citizen or a legal landed immigrant
  • Must have a valid Canadian issued driver's licence, not a learner's permit
  • Must have sufficient employment or pension income to service all debts
  • Must have signed a GM Financial credit consent form (all lessees at time of application)
  • Must not be an auto dealership or vehicle rental agency

Ineligible Vehicles

  • U.S. imported vehicles
  • Vehicles with an accident history
  • Vehicles that have been branded "rebuilt", "salvage" or "irreparable" at any time do not qualify for an GM Financial programs
  • Used vehicles (except Demonstrators units)
  • The vehicle must not be used for the following commercial purposes: livery, limousine, omnibus, sightseeing conveyance, driver education/training, emergency response, law enforcement, service or courtesy, snow-plow, towing, rental or sub-lease, taxicab, racing, private or public carrier, UBER, TURO and any other private transportation vehicle company

What is the mileage allowance on a lease?

  • Your lease contract will show (Cadillac only 16,000km/year) 20,000km per year, 24,000km per year, or you may pre-purchase additional kilometres from .06/km depending on the model.
  • Excess kilometre charges standard for vehicles leased to consumers are $0.16
  • Excess kilometre charges14 standard for vehicles leased to businesses are $0.20

 

What are my responsibilities for maintenance? 

Maintenance requirements are the same whether you purchase or lease. There are 4 free oil changes included with new Chevrolet vehicles.

 

Can I add accessories to my leased vehicle or modify the vehicle?

If you are returning the vehicle at the end of the lease, it must have the same equipment as the day you drove it home.You may personalize your vehicle with GM accessories. These can be installed prior to you taking delivery of your new vehicle. Inquire with your Salesperson or Business Manager.

 

Can I break the lease early?

Yes, you can buy out the vehicle any time or you can return the vehicle, but understand you are still responsible for any outstanding payments if vehicle is dropped off early. We may be able to help you get into a new vehicle earlier than the end of your current lease if this is what you are looking to accomplish. Please speak with your Salesperson for assistance.

 

Can I transfer my lease to someone else?

Yes, General Motors Financial (GMF), who looks after finance and lease contracts, will facilitate a lease transfer providing there is no more than 6 months remaining on the lease contract. The current fee for this is $594.95 including HST. All inquiries for this should be directed to Chris Blanchard at OMS and we will start the process. Please understand it may take up to a week to get approvals and final documentation from GMF. There may be other costs, such as licensing.

 

Can I lease under my company name?

Yes. When dealing with business lease applicants, the business owner/principal may be required to co-sign the lease. GM Financial will consider business leases where an owner/principal is named as co-lessee to a maximum of three (3) active leases at any point in time. In cases where a business lessee wishes to expand their dealings with GM Financial beyond the threshold of three (3) active leases, the business applicant must solely (without an owner/principal as co-lessee) meet approval requirements as deemed appropriate by GM Financial at time of application.

Do all business applications require a personal guarantor?

No. If sufficient and satisfactory information can be obtained through qualified credit reporting agencies, a completed business application may be all that is required to grant credit approval. The credit decisions are based on the credit-worthiness of the business and may require the addition of a personal co-lessee at the discretion of GM Financial. Note: all applications on sole proprietorships will require the owner to be a co-lessee.

 

What happens to the lease if in the event of a death?

Please contact 1-800-465-4591 or email cservice@gmfinancial.com

 

What are my choices at the end of the lease?

  • Buy the vehicle3 (we can arrange financing so you can keep making payments) and keep it or sell it
  • Return it4 and get a new one
  • Return it5 and do nothing

 

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Payments

What are the upfront costs of doing a lease?

  • 1st payment - monthly or biweekly
  • PPSA - amount depends on term ($30.75 to $57.87)
  • License cost - $32 for a transfer, $179 for new plates and sticker for a year

 

Can I change my bi-weekly payment to monthly payments?

These changes can only be made prior to taking delivery and must be set up in the original contract. At this time, GMF is unable to modify after you have taken delivery.

 

I have bad credit - can I still lease?

We will submit all credit applications for approval. Every situation is unique and our Business Managers are experienced in the area. We will work to help you get into a new vehicle.

 

Do I need to have a security deposit on my lease?

Security deposits6 are not required on a consumer lease, unless it is part of the credit approval conditions. Business lessees are required to provide a security deposit equal to one monthly payment unless otherwise stipulated at time of approval.

 

Do I need to put money down?

Many leases are done with $0 down payment, subject to approval. We can tailor the lease to suit your specific needs and budget. Money down will reduce the payment. 

 

Can I trade in a vehicle when I lease?

Yes, you made trade in a vehicle. If there is equity in your trade, you may request the cash back (i.e. if your trade value is $8000 and the lein amount is $3000, you could take $5000 back to you in equity).

 

What if I change bank accounts during my lease?

Please contact 1-800-465-4591 or email cservice@gmfinancial.com

 

Can I change the date of my payment?

GMF is unable to modify the payment date or frequency.

 

Can I pay my lease payment with a credit card?

You must provide a void cheque or PAP (Pre-authorized Payment form) when you take delivery of your new vehicle. This is the only payment method allowed at this time.

 

Can I write off my payment?

Conversations should be had with your accountant or financial advisor on this. If you are eligible to write-off all or a portion of your vehicle, the CRA will make adjustments based on the payment for a lease or on a depreciation12 percentage if you purchase.

 

With a lease, am I protected from possible negative equity?

With a lease, you avoid the potential risk that your vehicle's value has declined beyond its projected residual7 value at the end of your lease term.

 

Can I buyout8 my lease prior to the end of the lease?

At any time during the lease, the lessee may buyout the vehicle. We would obtain a lessee's buyout quote (early15 or at maturity) and other information related to the lease.

 

What do I need to buyout my lease vehicle?

The lessee would require the following documentation. OMS will send to GMF for the buyout of the vehicle:

  • Copy of the buyout quote with odometer reading
  • A certified cheque or bank draft totalling the amount18 on the quote plus applicable taxes added
  • A completed Vehicle Disclosure Statement (VDS)
  • Valid safety certificate (emission test not required for buyout)

Once completed documentation is received, GMF will issue:

  • Signed bill of sale
  • Lein release

 

What are my financial responsibilities at the end of the lease?

The lease we do for you with GMF is a closed end lease, which means your only responsibility is paying for excess kilometres9 and or excess wear and tear (unless you added the XS Wear Protection10)

 

How do I know how much I owe for excess wear and tear?11

OMS will help arrange the vehicle inspection to be done approximately 60 days prior to the end of your lease. Once this has been completed by a third party under the direction of GMF, we can help you understand what charges you can expect from GMF once the vehicle is returned. By arranging this with you early enough, you will have the option of getting the repair done prior to the vehicle return. So, no surprises.

 

I'm returning my lease early - will payments keep coming out of my account until the end?

If the vehicle is returned16 prior to maturity with more than three months outstanding, the lessee is responsible for all remaining payments and those payments are to be forwarded to the GM Financial within ten (10) days of the return of the vehicle.

 

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Insurance

What are the insurance requirements to lease a vehicle?

  • Permission to rent or lease endorsements with GM Financial as lessor13
  • Name of insured policy holder must be/be one of the lessee(s) and must have a valid driver's license when lessee is a consumer
  • Policy effective date must be on or before the delivery date and the expiry date must be at least 30 days from the delivery date
  • Vehicles with an MSRP up to $75,000
    • Liability - minimum $1,000,000.00
    • Collision - maximum $1,000.00
    • Comprehensive - maximum $1,000.00

 

Can I add coverage to protect me from unexpected damages?

  • XS WEAR coverage can be added to your lease contract, it will cover up to $3,500 of wear and tear charges as detailed in the lease schedule guidelines, excess kilometres up to 999km
  • Deductible may apply
  • Coverage applicable upon lease contract maturity
  • Valid for lease term of 24 to 60 months

 

What if I have an accident in my leased vehicle?

If your vehicle is a total loss, or stolen gap coverage helps in most cases, pay off your vehicle when insurance doesn't cover the full loss.

 

My lease term is longer than my warranty term - can I add more warranty?

Yes. GM does make an extended coverage for leasing customers to match their lease term17 and mileage to the warranty term and mileage.

 

What if I change insurance companies during my lease?

Please contact 1-800-465-4591 or email cservice@gmfinancial.com 

Also, provide your new insurance company with the lessor name and address

Lessor Address:

GM Financial Canada Leasing LTD
2001 Sheppard Ave. E., Suite 600
Toronto, ON
M2J 4Z8

Mail New Insurance Info to:

GM Financial Canada Leasing LTD
P.O. Box 1230, Station A
Etobicoke, ON
M9C 4V5

 

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Definitions


 1. Lease: An agreement under which the vehicle owner (lessor) permits its use by a customer (lessee) for an agreed-upon period of time (term)

2. Lessee: The user of the vehicle

3. Purchase Option: A lease agreement provision allowing the lessee to purchase the vehicle at either scheduled termination or early termination. The purchase option at lease termination is a fixed dollar amount determined at the time of lease signing

4. Vehicle Return At End of Lease: Means if the customer does not exercise any purchase option granted by the applicable contract at the expiry of the term of he applicable contract

5. Vehicle Return Date: The date that a vehicle is returned to a dealer by a customer

6. Security Deposit: A refundable dollar amount paid by the lessee to the lessor at the time of lease signing. This amount can be used to pay all or part of the lessee's excess kilometres or excess uses charges, or other amounts owed at lease end

7. Residual: The estimated value if the vehicle at the end of the lease term, used in the calculation of the monthly payment

8. Vehicle Buyout: The customer or dealer on the customers behalf exercises any purchase option granted by the applicable contract at the expiry of the term of the applicable contract

9. Excess Kilometres: Kilometres exceeding the allowed kilometres driven in excess of the contractual allowance

10. XS WEAR Schedule: the GM Financial product that provides coverage for overuse charges that could be assessed at lease maturity for wear and tear items such as dents, scratches, cracked/broken glass, upholstery stains, bumper damage or paint damage and is subject to a deductible

11. Excess Wear and Tear Provisions: A section of the lease agreement that establishes the lessee as responsible for the expense to repair or replace vehicle parts which are worn or damaged beyond what the leasing company considers normal

12. Depreciation: The difference between the leased vehicle amount and residual, or the amount assessed the lessee for vehicle use

13. Lessor: The owner of the leased vehicle

14. Excess Kilometre Charge: A charge per kilometre that is assessed for kilometres driven in excess of the contractual allowance

15. Early Vehicle Buyout: When the customer or the dealer on the customer's behalf exercises any purchase option granted by the applicable contract at any time and prior to the expiry of the term of the applicable contract

16. Early Vehicle Return: If the customer for any reason or under any circumstances returns the vehicle to the dealer prior to the expiry of the term of the contract

17. Term: A contractual period for which the lessee agrees to use and pay for the use of the vehicle

18. Leased Vehicle Amount: This is the amount agreed upon by the lessee and the lessor for the vehicle and any other items, such as accessories, extra equipment, freight, applicable taxes (e.g. federal air-conditioning tax) and pre-delivery inspection. GST not included.

 

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