Guide to Leasing a Car in Canada

A car lease is a great option for many drivers. After all, leasing a car allows you to drive the latest models, enjoy cutting-edge features, and regularly adjust your vehicle to your current preferences.

Of course, it’s important to understand the leasing process—and ensure that your lease agreement meets your needs—before signing any papers. 

In this guide, we’ll walk you through how Canadian car leases work and explain what you can expect from Hyundai Canada’s leases.

Guide to Canadian Car Leases

Leases can be complex legal agreements, so it’s important to make sure that you fully understand how they work before signing any papers. Below, we will cover the basics of leasing a car in Canada, including what to expect from your lease terms and what you should consider before leasing a car.

What is a Car Lease?

A car lease is essentially a long-term car rental agreement.

The organization that owns the car (also known as the lessor) gives a particular individual (also known as the lessee) permission to use the car for a set period of time. Once the term is up, the lessee typically returns the car to the lessor—although many lease agreements give the lessee a few different options at that point, including buying the car outright.

Lease payments are generally based on how much the car is expected to depreciate within a particular period of time, rather than the total value of the car. As a result, lease agreements often include reasonable use limits to ensure that the car is not used or damaged so heavily that it depreciates more than expected.

Benefits of Leasing a Car in Canada

A car lease can provide drivers with a wide range of benefits. If you lease a car, you can expect to:

• Save on monthly payments: Since lease payments cover a vehicle’s depreciation instead of its total value, they are usually cheaper than finance payments.
• Access the latest models: When you upgrade a leased vehicle every few years, you have access to the latest models—along with their cutting-edge technology and safety features. You also get to enjoy any improvements to fuel efficiency, which can save you money over time.
• Avoid long-term maintenance headaches: Older vehicles often require costly repairs. Fortunately, leased vehicles are typically returned long before these issues begin to pop up.
• Enjoy flexible terms: Many leases offer a variety of options throughout and towards the end of the lease term, allowing you to customize your plan and adjust it as your needs change.

Things to Consider Before Leasing a Car in Canada

While car leases offer many benefits, they are also a long-term commitment. If you’re considering a car lease, it’s important to keep the following factors in mind. 

Monthly Payments and Fees

Before signing a lease, you should carefully review all fees and payment schedules to make sure that you can comfortably afford all payments.

The most crucial cost to consider is your monthly payment. In general, a monthly lease payment covers a leased car’s expected depreciation throughout the lease. This depreciation is also subject to an interest rate. 

Most lease agreements also outline fees that apply if you break a lease clause. For example, you may need to pay a fee for excess damage. Be sure to check this section carefully to avoid surprises down the road.

Wear and Tear Limits

Lease agreements will outline how much wear and tear the lessor considers acceptable when you return your car. For example, a lease agreement may say that the leased car can be returned with no more than one small stain in the upholstery and one chip in the windshield. 

These wear and tear limits are meant to keep the vehicle from depreciating beyond the pre-determined value; if you exceed them, you may be subject to fees. 

Wear and tear limits are created with the understanding that you will return a used car which has naturally accumulated some signs of wear. However, if you suspect that you might exceed your limits, you may be able to purchase a lease protection plan when signing your lease to safeguard against any unpleasant financial surprises at the end of your lease term.

Mileage Limits

Much like wear and tear limits, many car lease agreements include a mileage limit that stipulates how far you can drive the vehicle. The mileage limit is meant to keep the leased car from depreciating more quickly than expected. It’s important to review this section of your lease agreement carefully: lessees who exceed their mileage limit are typically subject to extra fees, but the lessor may be able to extend the limit before you sign your agreement. 

Lease-End Options

Your lease agreement should clearly describe any end-of-lease options that are available to you, including options during and at the end of your lease’s term.

Car leases are a long-term commitment but sometimes plans change. Your lease agreement should outline your options if you’d like to end or modify your lease before its end date. It should also describe any fees that may apply.

Similarly, your lease agreement should provide you with a strong understanding of your options at the end of your lease term. Generally, at the end of a car lease, the lessee returns the vehicle to the lessor. However, some agreements allow the lessee to purchase the car outright or renew their lease. Be sure to carefully review this section so that you can better plan ahead for the end of your lease. 

Your Responsibilities and Lessor-Specific Requirements

Make sure that you fully understand all of your obligations before signing a lease agreement. 

Lessees are required to maintain their leased car. Additionally, lessors may have extra requirements, including extra insurance coverage or stipulations about who may perform maintenance. Any lessor-specific requirements should be included in your lease agreement.

Lessor-Specific Benefits

Some lessors provide benefits for their lease customers, such as extra insurance or roadside assistance coverage. Make sure that you fully understand which benefits are available to you, as they may improve your driving experience or save you money.

Guide to Leasing a Car with Hyundai in Canada

Hyundai Canada offers a wide range of flexible leasing options that are designed to fit around your needs. 

Benefits of Hyundai Motor Finance Leases in Canada

Hyundai’s leases provide lessees with a variety of benefits, including affordable payments and warranty coverage. Explore some of the benefits below to discover how a Hyundai lease can transform your driving experience.

Save Money with Affordable Payments

Since lease payments cover a car’s depreciation rather than its total value, our lease plans are an affordable way to get behind the wheel of a new Hyundai. It’s cheaper to lease a Hyundai than it is to finance one, which leaves you with more money at the end of each month.

Experience the Latest Technology

At Hyundai, we aren’t just dedicated to developing improvements: we’re committed to finding new ways to make your life safer and more convenient. By upgrading your vehicle every few years, you can ensure that you have access to our latest technology, Bluelink® connectivity features, and safety systems (subject to model compatibility).

Adjust Your Vehicle to Meet Your Changing Needs

Hyundai Canada offers a wide range of cars, each of which is better suited for a different set of needs. When you upgrade your vehicle on a regular basis, you give yourself a chance to reevaluate your situation and choose the car that is the best fit. Regardless of whether you’re looking for a sportier car, extra seats for your growing entourage, or an open-bed truck for your new business, a lease allows you to take full advantage of Hyundai’s varied vehicle lineup.

Enjoy Warranty Coverage

When you lease a car through Hyundai Motor Finance in Canada, your vehicle is covered by the manufacturer's factory-backed warranty, which includes a 5-year/100,000 km Comprehensive Limited Warranty, 5-year/100,000 km Powertrain Warranty, and 5 years of access to our Roadside Assistance Program. This coverage can help to reduce unexpected bills, allowing you to focus on enjoying your new car. Terms and conditions apply.

Receive Guaranteed Asset Protection

All Canadian Hyundai Motor Finance leases come with Guaranteed Asset Protection (GAP), which pays the difference between the car’s total value and your insurance company’s payout if your leased car is deemed to be a total loss. This coverage can provide peace of mind and financial protection in many otherwise stressful situations. 

Hyundai Lease Terms and Options

Hyundai Motor Finance offers a wide range of leasing options in Canada, giving you the freedom to choose what works best for you. 

Below, we’ll cover what you can expect from your Hyundai lease.

Term Lengths

Canadian Hyundai Motor Finance leases typically range from 24-60 months. Longer terms generally help to reduce your monthly payments, while shorter terms give you the ability to upgrade your vehicle on a more frequent basis. 

Wear and Tear Limits

Most vehicles that are leased from Hyundai Motor Finance in Canada are subject to the following wear and tear limits:

• Scratches on exterior panels/hood (no paint damage): smaller than 10 cm, with a maximum of 5 scratches per panel
• Dents on exterior panels/hood (no paint damage): smaller than 5 cm, with a maximum of 5 dents per panel
• A single windshield chip (no cracks): smaller than 0.6 cm, located outside driver’s field of vision
• Interior scuffs, stains, burns, cuts, tears, and holes (on all interior surfaces, including upholstery, carpets, etc.): smaller than 0.6 cm, with a maximum of 2 in the entire car
• Tires: minimum tread depth of 0.33 cm, tires on vehicle should match the original tire type, size, and speed rating

If you suspect you might exceed these limits, you can purchase Hyundai’s Excess Wear & Use Protection Plan. The plan covers up to $7,500 worth of repairs for a wide range of parts when you return your vehicle at the end of your lease, safeguarding you against unexpected bills.  Terms and conditions apply.

Please note that the list above is subject to change and may not be exhaustive. If you’re a current lease customer, check your lease agreement to discover how much wear and tear you are allowed. If you’re interested in leasing a Hyundai, you can contact the Hyundai Motor Finance team for more information about wear and tear requirements.

Mileage Limits

Since each driver’s needs are different, we don’t take a one-size-fits-all approach to setting lease mileage limits. Instead, when we set up your lease agreement, you will have the option to choose how far you intend to drive your vehicle annually. Our standard options range from 16,000-24,000 km/year, with additional mileage packages available. Since a vehicle’s mileage affects its value, lower mileage limits result in cheaper lease payments.

Lease-End Options

Hyundai lease customers have several different options when their lease term comes to a close:

• Renew your Hyundai lease: Continue your lease and get behind the wheel of a new Hyundai, where you can enjoy our latest features, technology, and safety updates.
• Purchase your leased Hyundai: If you love your current Hyundai, you can purchase it and continue to enjoy it beyond the length of your lease term.
• Return your leased Hyundai: You can return your Hyundai to the dealership that processed your lease agreement. This option gives you the freedom to purchase a new car outright if that better suits your needs.

Please check your lease agreement for more information about the lease-end options that are available throughout your lease term.

Experience the Benefits of Leasing a Car Today

Leasing a car offers flexibility and affordability, making it a great option for many Canadian drivers. But Hyundai’s factory-backed warranty, Guaranteed Asset Protection coverage, flexible terms, and wide range of vehicles sweeten the deal even further. 

To customize your dream Hyundai and explore its lease pricing, please check out our Build & Price tool. You can also discover our lease offers online or reach out to your local dealership for more information.

Frequently Asked Questions About Leasing a Car in Canada

Do you still have questions about leasing a car in Canada? Please feel free to check out our list of frequently asked questions below, or contact your local Hyundai dealership for questions about leasing a Hyundai.

Is it better to lease or finance a car?

Leasing and financing are both excellent options, but they are better suited for different situations.

It is better to lease a car if you plan to upgrade your car frequently, or if you anticipate that your vehicle needs may change in the near future. Additionally, lease payments are generally cheaper than finance payments, making leasing a good option for those who would prefer to prioritize other financial commitments.

On the other hand, if you prefer to keep the same car for a long period of time, it may be better to finance a car.

How does car leasing work in Canada?

When you lease a car in Canada, you essentially rent it for a long, pre-determined period of time (usually about 2-5 years). You are responsible for making monthly payments, but these payments cover the car’s depreciation rather than its total value so they are less expensive than they would be if you financed the car. At the end of the lease term, you usually return the car to its owner. However, many lease agreements allow you to purchase the car at the end of the lease period or renew your lease.

Can you lease a car with bad credit?

Yes, many lease providers allow you to lease a car despite having bad credit. If you have poor credit, Hyundai can work with you to find a solution.

Can you lease a car with no credit history?

Yes. Depending on the lease provider, you may be able to lease a car without any credit history. If you do not have any credit but would like to finance a Hyundai, please contact your local dealership for assistance.

Does leasing a car affect my credit score?

Yes, a car lease will affect your credit score. When you apply for a lease, Hyundai Motor Finance runs a hard credit check on your credit profile which can temporarily have a small negative impact on your credit score. However, making regular lease payments will improve your credit score. Additionally, a car lease may help to improve your credit mix (a measure of how diverse your credit accounts are), which will improve your credit score.

Disclaimer: This blog post is for informational purposes only and may not be comprehensive or reflective of changes to policies or availability. For the most accurate and up-to-date information about Hyundai leases, please contact Hyundai Motor Finance. Additionally, any references to Hyundai leases above refer to leases offered in Canada by Hyundai Motor Finance.