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Leasing a car is a unique financial arrangement and while it has its perks, experts say it suits a fairly slim group of people.

The biggest draw for leasing is lower payments, and on a shiny new car no less. This is usually what hooks drivers on a tight budget.

“When it comes to leasing, new vehicles is definitely a big part of it,” said Brandon Wiebe, a fee-only financial planner with Money Helps, based in Saskatoon.

“You’re getting into a vehicle that looks brand new, shouldn’t require immediate maintenance, has updated features, whether that’s safety or audio. And then another benefit that people see is the lease payments will tend to look lower than your purchasing new vehicle payments, so it’s less restrictive on their cash flow, right?”

A car lease is essentially a long-term rental: you’re paying the dealership for use of a car over an agreed-upon period of time, usually a few years. Though you aren’t an owner of the vehicle, monthly lease payments are typically lower on a new car than if you were paying off a loan.

That one detail — the lower payment — convinced Stephanie Wallcraft to sign a lease in her 20s.

It was a mistake, said Wallcraft, a freelance automotive journalist, co-host of Modern Motoring, and former president of the Automobile Journalists Association of Canada.

“The reason I call it a mistake is that after a while, I started having problems with the car and I wanted to get rid of it,” Wallcraft said. “And it was very difficult, because getting out of a lease is far more complicated than getting out of financing.”

Young people are still setting up their lives — they might have to move for a job, they might start a family, there may be job change or loss. Although that lower payment may look smart for their budget at the time, Wallcraft says it’s still not worth it for most.

“People in their 20s, trying to get started, I would never advise leasing a car,” she said.

Essentially, leasing means your money is going to the dealership and not your own equity in a car, Wallcraft explained. You are paying for the depreciation of a new car, which loses value sharply after driving off the lot — usually around 20 per cent. You are paying the dealership and at the end of the term, you still don’t have a car.

There can be unpleasant surprises at the end of a leasing term, Wallcraft added. The vehicle will be examined carefully for any damage, and if you exceeded the mileage outlined in the contract, you’ll be hit with fees.

“It can be a pretty surprising amount at the end of the whole thing,” Wallcraft said, “and there’s no way to get out of it.”

When you finance a car to own it, however, you start with negative equity — you owe more on the car than it’s worth to sell — but after a certain amount of time, that equity turns in your favour.

“It takes a few years, depending on the length of the financing term,” Wallcraft said. “It takes some time where you’ve paid off enough of the car that you can then sell it for what it’s worth.”

For car lovers who want a fresh ride every three or four years, financing to own still has merits over leasing, Wiebe said.

“Even with purchasing vehicles every three years, you can still come out ahead by purchasing and reselling, because at least you are building some equity by creating ownership of the car that you’re paying for,” he said.

“But for most young people, buying and owning for a longer period is going to really free you up to be able to put money elsewhere, especially towards longer-term savings.”

As for leasing an electric vehicle, Wallcraft called the financial pros/cons analysis “less predictable” in this relatively new market. Residual values of EVs have yet to be fully understood, she said — the value the car holds over time, which lease payments are based on.

But lease contracts are very hard to break, Wallcraft noted. So if you don’t like the EV lifestyle and all it entails, you’re stuck or punished.

“I can’t imagine how difficult it would be to try to offload an EV lease and try to find somebody who wants to take that over when there’s really only 10 per cent of the market that’s showing a strong interest in EVs today,” Wallcraft said.

“That will change over time, but that would be extremely difficult. Better to finance at a rate you can afford, and then, even if you haven’t fully paid it down, at least the car is yours to make the decision about what to do with it.”

So who is leasing for? Wealthy customers, mostly. There’s less drama with a new vehicle under warranty, Wiebe pointed out.

“Let’s say you’re getting into a high-paying profession that demands a lot of your time,” he said. “You’re not having to deal with buying and selling a vehicle. You sign up, have that simple payment, everything’s under warranty, and you kind of take back both the time and having to think about that area of your life.”

Wallcraft said leasing is also good for corporations that prefer not to have ownership of a car on their record, said Wallcraft.

“It’s also a good situation for highly affluent customers who want to drive the latest and greatest,” she said.

“They know they want to have something brand new every two, three or four years. And they’re happy to essentially treat it like a subscription.”

CALGARY – Unifor says it has filed for conciliation in its contract talks with railway company Canadian Pacific Kansas City Ltd.

The union represents more than 1,200 workers at CPKC, including mechanics, labourers, diesel service attendants and mechanical support staff.

Unifor says its negotiations with CPKC have reached an impasse over key issues.

Unifor Local 101R officially opened contract talks with the railway earlier this month.

Among the top concerns raised by the union were high levels of contracting out, forced overtime and company policies that hurt work-life balance.

CPKC says it is focused on arriving at a negotiated outcome that is in the best interests of its employees and their families.

This report by The Canadian Press was first published Oct. 29, 2024.

Companies in this story: (TSX:CP)

The Canadian Press. All rights reserved.

The number of newspapers endorsing a candidate for president has dwindled with the industry’s financial troubles the past two decades, in part because owners reason that it makes no sense to alienate some subscribers by taking a clear stand in a politically polarizing time.

Yet in the past week, The Washington Post and Los Angeles Times have angered readers for precisely the opposite reason: by choosing not to select a favored candidate.

The fallout from both decisions continued Monday, with Post owner Jeff Bezos taking the unusual step of publicly defending the move in the columns of his own paper. Three members of the Post’s editorial board resigned their positions and some journalists pleaded with readers to not express their disapproval by canceling subscriptions. Many thousands have already done so.

Bezos, in a note to readers, said it was a principled stand to ditch endorsements. People essentially don’t care and see it as a sign of bias, he said. His comments appeared hours after NPR reported that more than 200,000 people had canceled their Washington Post subscriptions.

If NPR’s report is true, that would be a startling blow to an outlet that lost money and shed staff despite having more than 2.5 million subscribers last year. A Post spokeswoman would not comment on the report.

Subscribers are falling away in recent days

The Times has acknowledged losing thousands of subscribers due to its own decision.

Both newspapers had reportedly prepared editorials supporting Democrat Kamala Harris. Instead, at the behest of Bezos and Patrick Soon-Shiong at the Times, they decided not to endorse. Post publisher Will Lewis called it “a statement in support of our readers’ ability to make up their own minds.”

By announcing their decisions within two weeks of Election Day, however, the newspapers left themselves vulnerable to criticism that their publishers were trying not to anger Republican Donald Trump if voters returned him to power. “It looked like they were not making a principled decision,” said John Woolley, co-director of the American Presidency Project at the University of California-Santa Barbara.

Retired Post editor Martin Baron, on social media, said the decision showed “disturbing spinelessness at an institution famed for courage” and that Trump would see it as a further invitation to intimidate Bezos.

Endorsements have a long history

Back in the 1800s, newspapers were sharply partisan in both their news pages and editorials. Even when a trend toward unbiased news reports took hold in the 1900s, editorial pages remained opinionated and the two functions were kept separate.

As recently as 2008, 92 of the nation’s 100 largest newspapers endorsed either Democrat Barack Obama or Republican John McCain for president. But by 2020, only 54 made a choice between Trump and Joe Biden, according to the presidency project. Figuring there were even fewer this year, Woolley said they aren’t even planning to count.

Studies found readers paid endorsements little heed and, in a digital world, many didn’t understand the distinction between straight news stories and advocacy-driven editorials. In many cases, chain ownership took the decision out of the hands of local editors. At a time the news business is struggling, they didn’t want to give any readers an excuse to leave.

“They really don’t want to rattle or piss off the people who are not going to like their endorsement,” said Rick Edmonds, media business analyst at the Poynter Institute, a journalism think tank. “The solution is just not to do them.”

That hasn’t seemed to fly at newspapers in two large metropolitan areas with liberal populations. The Post, under Baron’s leadership during the Trump administration, saw its circulation spike with aggressive political coverage that frequently angered the former president.

The Post’s decision drew ire from many quarters

Besides Baron, the decision was denounced by Watergate era reporting legends Bob Woodward and Carl Bernstein. Columnists Robert Kagan and Michele Norris said they were quitting the newspaper in protest. Three of the nine members of the Post’s editorial board said they were leaving that role.

Out West, a Los Angeles Times editorial writer, Karin Klein, wrote in the Hollywood Reporter that she was quitting the newspaper. Klein said that while Soon-Shiong had the right to impose his will on editorial policy, by making the non-endorsement so late in the campaign he was effectively expressing the opposite of the neutrality he claimed to seek.

Indeed, timing was the one regret Bezos expressed. “I wish we had made the change earlier than we did, in a moment further from the election and the emotions around it,” he wrote. “That was inadequate planning, and not some intentional strategy.”

In an article about the continuing fallout on the Post’s website Monday, more than 2,000 people left comments, many of them saying they were leaving. Even former GOP congresswoman Liz Cheney said she was canceling.

“From what I’ve seen in recent days, the paper is hearing its subscribers very clearly,” Post media critic Erik Wemple said during an online chat Monday.

There are worries that journalists will be the ones hurt

The protests have left some journalists alarmed, worried that they and their colleagues would only be hurt in the end. The union representing Los Angeles Times workers issued a statement last week that “before you hit that ‘cancel’ button,” recognize that subscriptions help underwrite the salaries of hundreds of journalists.

“The more cancellations there are, the more jobs will be lost, and the less good journalism there will be,” Post columnist Dana Milbank wrote.

It would be better, one commenter on the newspaper’s website said on Monday, to boycott Amazon — founded by Bezos — than the Washington Post.

Milbank said he was angered by the decision, too. He helped organize a protest letter that some of the paper’s columnists signed. But he noted that, except for the endorsement decision, he’s seen no evidence of Bezos interfering in the Post’s editorial operations.

“For the past nine years, I’ve been labeling Trump a racist and a fascist, adding more evidence each week — and not once have I been stifled,” he wrote. “I’ve never even met nor spoke to Bezos.”

The owner said as much in his column. “I challenge you to find one instance in those 11 years where I have prevailed upon anyone at the Post in favor of my own interests,” he wrote. “It hasn’t happened.”

Some newspapers are bucking the trend of non-endorsements. The Oregonian, for example, reversed its decision not to endorse after staying neutral in 2012 and 2016. “We heard the community’s disappointment over our non-endorsements loud and clear,” editor Therese Bottomly wrote in response to a question by Poynter’s Edmonds.

In Cleveland, Plain Dealer Editor Chris Quinn polled his editorial board about whether to make a presidential endorsement. “We don’t delude ourselves about our presidential endorsement impacting voters,” Quinn wrote. “If we are not going to impact voters, why publish something that will anger half our audience?”

He cast the deciding vote. The Plain Dealer endorsed Harris. Quinn had raised the question via text to some of his readers. They felt a non-endorsement would be a betrayal, he wrote — an act of cowardice.

“That was enough for me,” Quinn wrote. “Our duty is to the readers.”

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David Bauder writes about media for the AP. Follow him at http://x.com/dbauder.