Understanding Car Leasing
Car leasing entails signing a contract and essentially renting the vehicle of your choosing. You will own the car only during the time it is leased, and then you can either choose to re-sign the contract or get a new vehicle. Unlike buying a car, no loan is involved and you won’t need to worry that you’re being denied a finance option by your local bank. Contracts are often good for two or three years, but there are some companies that offer yearly leases and five-year options as well.
Benefits of Leasing a Vehicle
There are real benefits to leasing a vehicle when compared to buying one outright. Purchasing a car isn’t for everyone, and for these individuals, leasing is definitely the way to go. If you’ve been wondering about leasing a car yourself, this list of benefits may help you to make your final decision.
Low or No Down Payment – Leases either require a low down payment to obtain the vehicle or none at all. Unlike buying a car that requires a down payment of at least a fourth or third of what the car is worth, leasing doesn’t require a significant amount of money to be put down before you’re able to start making payments. Many have also found leasing payments to be lower and more affordable than car loans.
Ability to Drive a New Car All the Time – When you buy a car, you’re the owner of that vehicle for years. Unfortunately, the average car has a quality life span of about five years and, after this time, things start to break down. With a lease, after your contract is up, you get to sign a lease for another newer and bigger car that fits your needs. Let’s say that you need a larger vehicle right now but years from now you need a smaller one; a lease enables you to do this without being tied down to any one car in particular.
Less Sales Tax – You’re not making a purchase of a car, so you’re not liable to pay a hefty sales tax like a buyer would. Depending on the price of the car and your down payment, the sales tax can be substantial and incredibly expensive for the average family. Leasing gets rid of this sales tax for you so that you’re only making payments on the actual vehicle itself.
No Hassle with a Trade-In – At the end of your contract, you’re not going to deal with annoying trade-ins that cause you to take less than what your vehicle is even worth. You just return the vehicle you’ve been driving, choose another car if you’d like and sign a new contract for two or three years. It really is that simple to lease a great car.
Lower Repair Costs – Because the majority of leased vehicles are under the factory’s warranty, you won’t have to worry about hefty repair costs if something breaks down. A lot of leasing companies also offer a range of protective insurance policies that you can add to the lease so that repairs are no longer a problem for you in the future event that something breaks down.
How to Know if Leasing is the Right Option for You
Leasing is the right option for you if you’re a growing and changing family that doesn’t have the money for a hefty down payment or the time for frustrating trade-ins. It’s great for those who need or want a new car every few years and don’t have the funds available to do this with buying alone. It might be something to consider if you’ve been struggling to purchase a car or are tired of being locked down into a car loan contract for five to seven years only to be left with a vehicle that needs major repairs or full replacement.