Whether you’re interested in an all-terrain vehicle (ATV) for business or pleasure, there are multiple financing options available. Knowing the benefits and challenges associated with leasing vs. buying an ATV can help you make a more informed decision about which financing option is right for you.
Key Points
- You can finance or lease an ATV in Canada, however, ATV leasing for individuals is very uncommon.
- ATV rentals are widely available in Canada and can be a great alternative to financing or leasing if you want to ride occasionally.
Can You Finance An ATV In Canada?
Yes, ATV financing is widely available through banks, dealerships and ATV manufacturers. The lender will determine if you meet the qualification criteria and make you an offer with specific terms and conditions. You typically have to come up with a down payment. You also have to make monthly payments, including interest, until you pay off the loan in full. Once the loan is paid, you own the ATV.
To qualify for financing, most lenders will look at several factors, including your income and employment, the size of your down payment, and your credit score. Having a good or excellent credit score will help you secure a lower interest rate and better terms. It’s still possible to find financing with a bad credit score however, you can expect to pay a higher interest rate.
ATV Financing Features
- Interest rate: If you want to finance an ATV, compare multiple companies to see where you can get the best interest rate. Rates generally range from 5% to 15% but vary based on your credit score, down payment, lender and your ATV model and condition.
- Term length: Typically range from two to seven years, but your loan term can vary based on your credit score, finances, your ATV model and condition.
- Payments: Your monthly payments will depend on your loan amount, interest rate and the length of your loan. Shorter loans typically come with a higher monthly payment and a lower interest rate. Longer loans have lower monthly payments, but you’ll pay more interest over the course of the loan.
Learn more: How To Finance An ATV In Canada
Can You Lease An ATV In Canada?
ATV leasing is uncommon in Canada for individuals or personal use. In fact, you’d be hard-pressed to find a dealership that offers ATV leasing in Canada. Its limited availability may be attributed to the seasonal usage of ATVs. Leasing agreements typically have fixed terms, which may not align with the seasonal nature of an ATV.
That said, if you’re a business, you may find more leasing opportunities. For example, Polaris Leasing offers multiple types of ATV leasing options to businesses.
- Seasonal. Leases are designed to work around seasonal cash flow. For instance, if you don’t have much cash flow in the summer, you can design your lease so payments are lower in the summer.
- Semi-annual, annual, and monthly. This option offers additional ways to match your lease payment schedule to your cash flow.
- Step program. Increase or decrease your payments throughout the term of your lease to match your cash flow.
- Balloon payment. This option allows you to make a large payment at the end of your lease if you want to purchase the ATV.
- Stretch. Allows you to purchase the ATV early after you’ve made a specific number of payments.
How Does ATV Leasing Work?
When you lease an ATV in Canada, you get to use the vehicle for a specific amount of time, called your lease term. During this time, you make monthly payments.
In many cases, there are restrictions on how many kilometres you can put on the ATV. If you go over, you’ll usually have to pay a fee. When your lease term is up, you can give the ATV back, or you may have the option of purchasing it.
ATV Leasing Features
- Interest rate: The lease interest rate depends on several variables, including your credit score, the lease term, and the lender you choose.
- Term length: Lease terms typically range from two to four years.
- Payments: Your monthly lease payments can vary based on the loan amount, loan term, and interest rate.
What About ATV Rentals?
If you want to experience the fun and adventure of riding an ATV, but you’re not interested in the commitment that comes with leasing or buying, consider renting.
Renting an ATV allows you to skip the monthly payments, making it a more budget-friendly option if you’re only doing it every once in a while. Renting can also be a great choice if you don’t want to purchase the equipment needed to move an ATV from one location to another or if you don’t want to be responsible for maintenance and repairs.
Similarly, if you don’t have a garage or a place to keep an ATV, renting allows you to have some fun without having to worry about storage.
ATV Leasing vs Buying: Benefits And Drawbacks
As with any financial decision, there are benefits and drawbacks to consider when deciding if you should buy an ATV or lease an ATV in Canada.
Leasing An ATV
Leasing an ATV for personal use is generally not available in Canada, however, some companies do offer ATV leasing for businesses.
Pros
- Lower upfront costs. Many leases don’t require a down payment.
- Lower monthly payments. You can expect lower monthly payments when you lease, as you’re only paying for the depreciation of the ATV during your lease term. For business owners, this helps to free up cash flow.
- No maintenance costs. In some cases, maintenance and repair costs are included as part of the lease agreement.
- No need to resell. When you lease, you don’t have to worry about reselling the ATV unless you decide to purchase it.
Cons
- Lack of ownership. When your lease is over, you don’t own the ATV unless you decide to purchase it.
- Mileage restrictions. If you go over the mileage outlined in your lease agreement, you may be subject to overage fees.
- Unable to customize. When leasing an ATV, you can’t make any major changes or customizations.
If you don’t plan on regularly riding your ATV, renting an ATV may be a good alternative to leasing one.
Financing An ATV: Pros
- Build equity. As you pay off your loan, you build equity. Equity is the difference between what the ATV is worth, and how much you owe. Once it’s paid off, you can sell the ATV for cash.
- No mileage restrictions. When you own an ATV, you don’t have to worry about paying fees if you put on too many kilometres.
- Customization. Whether you want to paint your ATV, add decals, or change the tires, you can change and customize your ATV to suit your wants and needs.
- Ownership. Once you pay off your loan, you own the ATV.
Financing An ATV: Cons
- More expensive upfront. With a down payment and higher monthly payments, the upfront costs of financing are generally more expensive.
- Maintenance costs. You’re responsible for all maintenance and repair costs.
- Depreciation. Your ATV will depreciate over time, meaning it is worth less as the years go on.
How To Decide Which Option Is Right For You
Whether you lease or finance an ATV will depend on your specific wants, needs, and budget. To decide which ATV financing option is better for you, consider the following questions:
- Is it available? Leasing for personal use is limited in Canada. Be sure to check with your dealership to see if leasing is an option.
- Can you afford a down payment? Do you have cash available for a down payment on an ATV? If not, you may consider leasing.
- How often will you use the ATV? Remember, leases often come with mileage restrictions. If you go over, you may be subject to fees. If you don’t want to worry about mileage, financing might be the way to go.
- Are you prepared to pay for maintenance? What about repairs? If you don’t want to be responsible, consider leasing.
- Do you want to customize your ATV? Do you want to add a more comfortable seat or change the tires? You’ll have to finance if you want to make big modifications to the ATV.
- Do you want to upgrade every few years? If so, consider leasing. If you’re comfortable sticking with the same ATV for years to come, then you might choose to finance.
Bottom Line
If you’re interested in an ATV, for work or pleasure, there are various financing options available. If you don’t have the money available for a down payment and you want to keep your monthly payments low, a lease might make the most sense.
If you plan to use your ATV daily and you want the ability to customize, financing may be a better option. No matter what you decide, ensure you do your research so you make an informed decision.
