Leasing vs financing a new Toyota Fortuner – Costs compared

South Africans are increasingly turning to long-term leasing and subscription services as a way to own new vehicles instead of the more traditional bank finance model.

Leasing allows the consumer to drive a new vehicle every few years without the hassle of selling it, while car subscriptions take this business model a step further by also bundling insurance and maintenance costs into a single monthly fee.

“These financial models – which offer flexibility and convenience, with the added benefit of not having to commit to a long-term investment – are innovative alternatives to traditional car ownership,” said AutoTrader CEO George Mienie.

“As consumers seek more adaptable lifestyles, and as businesses look for ways to reduce fleet costs, these models could disrupt the traditional purchasing and financing structures during 2024.”

Leasing and subscriptions also allow a sizeable number of subprime motorists who may struggle to be approved for bank financing to get their own set of wheels, consequently enabling them to be more productive members of the economy.

Leasing vs bank finance

Two main players in the alternative ownership game are Toyota and Avis, both companies offering long-term subscription services on several popular vehicles.

These contracts include costs that would otherwise have to be paid individually, such as maintenance and insurance fees, roadside assistance, and vehicle tracking and recovery in the unfortunate event that it is stolen.

Other expenses such as “on-the-road costs” and annual licensing fees are also included.

Depending on the service provider, these subscription agreements can range anywhere from 12 to 60 months, with the vehicle to be handed back at the end of the period.

For those who may be interested in following the subscription route, the costs of getting a Toyota Fortuner 2.4GD-6 4×2 Auto from Avis and Toyota, compared to buying one on a finance plan, are shown below: