We all need a reliable car to use each and every day. Most people don’t get the car they need or want simply because of the buying process. When you buy a car, you need to get a loan to pay for it and you’ll be responsible for putting down a hefty down payment that you may or may not be able to afford. Next, you’ll have to decide if you can even trade-in your older vehicle to put money towards the purchase. After everything is said and done, you realize that you’re now tied down to a vehicle for years and years to come that will slowly but surely depreciate in value the moment you take it off the lot. This is when it hits you that leasing might have been the better option. For those who are new to the idea of leasing, you might wonder what it entails and what to expect from it.
What Exactly is Car Leasing?
When you think of leasing a vehicle, think about someone who rents an apartment. They get the thrill of having a comfortable place to live, but they’re not responsible for any repairs and if they choose to leave once their contract is up, they just get up and find something different. The same theory applies to leasing a vehicle. You sign a contract for a specified amount of time, usually two or three years, and you’ll have the car that you need throughout that time. Once the contract has expired, you can either re-sign it to keep the car or you can lease a different and newer vehicle. Because of this, you’re not tied down to a car that will break down and need major repairs after the first five years, only for it to need to be replaced fully after seven years of ownership. With leasing, you’re essentially able to drive a new car while paying about the same as someone with a car loan would be shelling out each month.
The Real Benefits of Leasing a Car
Now that you have an idea of what car leasing entails, you might be wondering what the true benefits are when you actually sign a contract. The first benefit is the down payment and the lack of one with most leasing companies. When you buy a car, you’re often told that you need to put a down payment onto the vehicle you’re looking to buy, and this can be a pretty substantial amount that is difficult for the average person to afford. When you lease a car, there is either a low down payment required or none at all. This saves you thousands of dollars on the lease when compared to the purchase of a new car.
Sales tax is another major factor when it concerns leasing a car. When you lease a car, you’re essentially renting it for the entire time it’s in your possession. When you buy a car, even if you’re making loan payments on it every month, you’ll still be responsible for the sales tax involved with the purchase of a new vehicle. Depending on where you live and where you purchased the car, this sales tax can be incredibly expensive and cause the vehicle to cost more than what the price tag said on the window in the car lot.
Leasing also allows you to essentially drive a new car every two or three years. When your contract is up, you can give the vehicle back to the lease dealer and choose a different car. This enables people to drive better and nicer cars than they would be able to afford to buy. There are no hassles with a trade-in after your lease is up, which is something beneficial to those who have dealt with trading in older cars to a dealership in the past.
Depending on your lease, contract and warranty, you may also not be responsible for repair costs. If something goes wrong within the car, it’s covered under the factory warranty and you won’t be the one left holding the bill. As you can see, leasing is often a more viable and worthwhile option to those who need a great car without the hassle of going through a typical dealership.