Most people know a few things about buying and leasing cars, but sometimes that may not be enough. The following are 9 reasons a car lease may be the better option for you.
1. No Downpayment
Perhaps one of the most obvious reasons you should consider leasing instead of buying is you get to skip the downpayment. You are not required to make a downpayment when you lease, but it will lower your payments if you choose to do so.
2. Lower Monthly Payments
When you purchase a vehicle, the monthly payment is based on the purchase price of the car whereas the lease payment is not. The amount you pay each month when you lease a car is based on the depreciation amount during your lease period. This keeps the payments reasonably low.
3. Under Warranty
One of the biggest perks of leasing a car is that you will only have it for two to three years. This means the car is under warranty the entire time you have it, so you do not have to worry about major repairs should they occur. Of course, you do have to keep up with maintenance appointments just like you would with a car you own.
4. No Depreciation Blues
New cars start depreciating the moment you drive them off the lot. Those who purchase a car will end up paying more than the car is worth by the time they are done paying for it. This is something you do not have to worry about if you opt to lease. You will return the car, and it will be up to the dealership to sell the car after that.
You know that it is hard to save money, but this will be even harder if you have a large payment to deal with. Leasing frees up some of your cash, meaning you can save or diversify your money without feeling as trapped as those who finance a new car. Keep in mind that your bill could be lower if you lease a cheaper vehicle just in case saving is your goal.
As mentioned above, the leasing term is usually around two to three years, but financing a car could lock you down for five years or longer. Some people end up paying for eight years, which can make them feel like they are in a prison of debt. You do not know what your financial situation is going to be in several years. Financial issues could even cause you to lose your car, which would severely hurt your credit, not to mention that you will lose all the money you invested in the vehicle. Leasing a car for two to three years is a much safer bet.
Those who drive their car for business purposes might be able to deduct a portion of the leased car’s depreciation and other costs. Loans on purchased cars are not deductible. Now, there is a lot to think about when considering this, such as the amount of time your car is used for business. Be sure to talk to a tax specialist so that you get this right.
8. New Car Option
One of the most coveted benefits of leasing a car is that you are going to be able to lease a newer model within a few years. Everyone wants a new model every few years, but those who purchase a car have a harder time switching. Those who lease simply have to return their car at the end of the contract and lease again. You know how quickly new models are made and how quickly technology changes, so you do not want to be stuck with a vehicle that will be outdated in five years.
9. Illusion of Ownership
A truth that many Americans will likely not like to hear is that purchasing a car with a loan is not true ownership. You are paying to use the vehicle until you finish paying for it, which could be a few years down the line. Then, you will actually own the car. The same thing goes with a financed house because you do not own it until you finish paying. Why pay so much for using a vehicle when leasing is pretty much the same thing. Of course, this excludes those who can purchase a car with cash without borrowing money from a bank or finance company.
Now, these are just some of the reasons why leasing a car is simply a smarter decision than purchasing. Hopefully, these few points made it easier to decide what your next step should be.