Less Repair Responsibility Comes with Leasing
Those who own vehicles can modify, sell, repair, and maintenance their vehicles any way they choose. Lessees, or those renting leased vehicles from lessors, are not nearly as responsible for repairs and maintenance as car owners are. Leased cars are always subject to manufacturer’s warranty, often totally covering repairs for damages that lessees are not at fault for.
Lessors of leased cars are usually responsible for routine maintenance procedures, such as oil changes or new tires. Lessees contact their lessors, typically dealerships, to schedule needed repairs. Car owners, conversely, cannot place the onus of repair and maintenance on anyone but themselves.
Pay Low Sales Tax with Leasing
Taxes are a necessary evil all car buyers and lessees must submit to. Buyers must pay sales tax on the entire purchase. Lessees, on the other hand, are subject to the car’s value during the lease term, not the car’s entire value. Such values are calculated per monthly payment in relation to the car’s overall value. For example, if someone outright purchases a $20,000 car, they will be subject to $20,000 multiplied by applicable state and local tax rates.
In its first year of lease, that $20,000 car may burn through $4,000 of its total value. The lessee would pay taxes on the first years’ value, $4,000, multiplied by applicable state and local tax rates.
Never Worry about Reselling Vehicles when You Lease
Outright cash purchases of cars are generally expensive. After a few years of use, car owners typically seek to resell their cars to private parties, as private parties pay more than dealerships. In order to maintain high resale value, performing regular maintenance on a vehicle is absolutely necessary. Such maintenance usually costs money and will always take up valuable time.
Unlike buying cars, leasing cars are not associated with pains that vehicle resale markets are known for. Dealerships are responsible for preparing the formerly leased vehicle for a new lease or for sale. Lessees need not worry about maintaining high resale value or preparing it for market.
Leases Do Not Require Hefty Down Payments
Financing the purchase of a car always commands the placement of a down payment as collateral. Car leases sometimes do mandate small security deposits, however, nowhere near the size of down payments.
Whereas very few vehicle financing deals forego down payments, many car leases do not require any collateral.
Never Worry About Future Value of Leased Cars
Those who purchase vehicles are wise to consider how vehicle value is likely to fluctuate over time. Various market factors that often occur after manufacture and purchase regularly affect future value of vehicles.
Whereas dealerships do care about future value of leased vehicles, lessees do not. Lessees simply pay monthly installments, use the vehicle through lease term end, and return the vehicle to the dealership.
As you can see, several factors make leased vehicles far more attractive than purchased vehicles.