When it comes time to acquire your next vehicle, you could choose to buy it outright. However, that can be expensive, and you may not want the vehicle for the next five years or longer. For those who are looking for an inexpensive way to obtain quality transportation without a long commitment, leasing may be ideal.
Most Leases Only Last Two or Three Years
Typically, a lease will last for somewhere between 24 and 36 months. This means that by the time the warranty expires on a vehicle, you could be trading it in for something newer. Trading in a vehicle every two or three years also makes it possible to get the newest safety features or the latest technology on every car that you drive.
Leases Are Great for Businesses
A lease may be ideal for businesses that are looking to reward employees for doing a good job. They may also work for companies as lease payments represent a tax deductible expense assuming that the vehicle is used for business purposes. It may be a good idea to consult with a tax attorney if you are thinking about deducting expenses related to a company vehicle.
Transfer a Lease Whenever You Want
If you feel like you can’t afford your lease or don’t want your car anymore, you can always transfer it to someone else. While the leasing company will have to approve the transfer, this is generally not an issue. Therefore, you can get out of your car payment without paying any types of fees or penalties to do so. Once the lease has been transferred, you are free to shop for a new lease or do whatever else you want with your extra cash each month.
Lock In Equity When the Lease Ends
It is commonly thought that you can’t get the equity that is built into a leased vehicle. However, if your car is worth more than the anticipated residual value at the end of your lease term, you may be entitled to a check for the difference. Remember, when you lease a vehicle, you are paying for the expected depreciation. If the vehicle depreciates less than expected, you should be able to get some of your money back.
Lease Payments Cost Less
When you buy a vehicle, you are paying the full market retail value when you purchase it. Therefore, you have a larger amount to either pay in cash or finance over a period of several years. Ultimately, the monthly payment to buy a car is going to be much higher than it is to lease a car assuming that you are comparing the same or similar cars. This may allow you to drive a nicer vehicle or one from a later model year than you otherwise would be able to afford.
You Don’t Have to Put Money Down
While many leases that are advertised in the newspaper show the price after a down payment, no payment is actually required. Typically, you want to put as little down as possible when you lease because you don’t need to build equity in a depreciating asset. If you don’t have a vehicle to trade or cash to put down, leasing may represent an attractive option that allows you to get the vehicle that you want while staying within your budget.
If you have the choice between buying or leasing a car, you should choose to lease. Doing so allows you to spend less money each month, avoid a down payment and affords you the opportunity to transfer your lease whenever it becomes necessary to do so. Compared to buying, leasing is the affordable way to obtain the reliable and stylish transportation that you want and need.