Do you buy your next car, or do you lease your next car? It’s a problem many consumers face when sitting at a car dealership considering finance options. Buying a car entails financing the full amount of the sales price, paying monthly payments for 60 to 72 months on average, and owning the car outright when you are finished making your payments. Leasing a vehicle means financing the amount the vehicle depreciates during the time you drive it, paying monthly payments for two or three years on average, and returning the car to the dealership when the lease is up.
It might sound like buying is a better option, but that’s only because you’re not considering the full effect buying has. Using a $50,000 car as an example, you’re dividing that amount of money into equal monthly payments while also adding interest, finance charges, sales tax, and other dealer fees. You pay for the car for five or six years and own it outright. When you lease a car, you finance only the depreciation aspect, which is around $15,000 on average. You drive it for a few years, turn it in, and get a new car. Since most people never pay off their cars before they trade them in, leasing is a much better option suited for most drivers. The only drivers who don’t benefit from a good lease are those who drive long distances and put excess miles on vehicles.
The Benefits of Leasing
In addition to the terms leasing has to offer drivers, there are many other benefits associated with this form of car buying. You never own your car, but you probably won’t own the car you buy outright, either. Many drivers want a new car before their five or six-year payments are up, and they trade it in. This means looking for a dealer willing to give you what you owe on the vehicle, which is usually impossible. Most people don’t put money down and take a massive hit on depreciation as they drive the car off the lot. It leaves you upside down, which means you owe more than the vehicle is worth. If you trade it in, you either pay off the remaining balance out of pocket or roll it into another new car. That only makes your new car that much more expensive. It also means you’re paying for a car you no longer drive for the term you just financed a new car.
– Leasing allows you to trade for a new car every few years with no rollovers or trade-in issues
– Leasing means you never owe money when you buy a new car
– Leasing means you get to drive a new car every few years
– Leasing means you never see warranties expire
– Leasing means you pay far less each month for a car that’s a lot more expensive
Leasing is more affordable. You only pay a portion of the actual price of the vehicle, and this drastically lowers your monthly payments. You still pay sales tax, but only on the amount you finance with the lease. You can purchase a much more expensive car for the same price you’d pay monthly for a far less expensive car when you buy outright, and sometimes that monthly payment is even lower.
The Comfort Factor
Driving a lease provides a sense of comfort in that you never experience major issues. Your car is never old enough to start going through the process of needing replacement parts or experiencing issues related to age. You never see your warranties expire, and you always have that comfort. It’s also nice to know you get a new car every two or three years on your terms, without owing anything when you turn in your lease, and you know you always have a safe, reliable, brand-new vehicle at home.
Leasing is a great option for almost any buyer who wants a nicer car for less money as well as any buyer who doesn’t put excessive miles on vehicles. It’s affordable, it’s safe, and it’s just like buying without the hassle of trading in your car for less than you owe every time you want a new one.