@Twostick you raise a good point. A lot of leases, and even financing, can have stealthy clauses that translate into a much higher cost of money.

For a long time, GM Canada used to pre-bill the entire amount of loan interest, so there was no benefit to paying off the vehicle early. For example, on a 4-year loan, the interest costs are $1500/year.

GM would add $6000 (4 x $1500) to the loan balance as of day one. So even if you paid off the car 3 years early, GM still got you for 3 years worth of interest.


In today's environment, with interest rates being low, information being more widely available (including online financial calculators) it may not be as bad. The exception would be subprime car loans which can go as high as 30% interest here.