The idea of acquiring a new car is heart soothing. However, there is a lot to think about before you acquire or drive your dream car. At first, you have to decide on what car you want and then make a decision about its financing. You could either choose to lease or purchase the vehicle. In this case, people’s options vary significantly due to individual situations and varying needs. Neither of the two alternatives is 100% better choice for all the people. Hence, you have to critically evaluate which option suits you best. Leasing is by far the most popular selection in the auto finance world, but it does not suit everyone.
Leasing is at first seems confusing and a little complicated. However, it is opportune for both the car dealers and individuals who cannot afford the expensive car loan payments. Here are more points that favor car leasing.
• Reduced financing costs
Leased vehicles only require depreciation funding and the costs that arise only during the lease period. For purchased vehicles, financing is based on the entire cost of the vehicle, less the down payment, and trade-in value. Therefore, a monthly lease payment will obviously be lower than the monthly loan payment amount. With the car leasing, you only service the residual value. Depreciation expense incurred is only for the lease period, not more. Moreover, leasing cannot put you in an upside-down position and is unlikely to adversely affect your financial plan.
• Lower out-of-pocket costs
Leased cars mostly have a warranty running all through three to four years. The warranty comes along with unexpected repairs during the lease period. This translates to low costs of repair and maintenance from your pockets all through this time. All you probably have to cater for are oil changes and tire rotation costs. Although maintenance is vital for a leased vehicle, the cost is quite cut down due to the warranty benefits.
• Lower down payment and initial costs
Most car leases have a small down payment saved up hence making it an attractive option. They require an amount ranging from zero to a few thousands of dollars upfront. As a result, many car deals are now being advertised as lease offers with the promise of low monthly pays and seeking to attract more leases than purchases. Other leases require neither a down payment nor upfront sales tax payments hence making the endeavor more affordable.
• Best alternative if buying is not an option
In some instances, a car may not be up for sale, but you could temporarily require its services. Even worse, most banks don’t lend more than $30,000 for a car loan. In such a situation, leasing could perfectly fit in as your only option.
• High up-to-date technology and safety features
Leasing allows you the access to latest version cars that you could not acquire through buying due to their high prices. With the lease option, you can obtain a new car after every few years to enjoy the advanced features. These vehicles have the latest and greatest technology and security features. More so, with a leased car, you need not worry about selling it wonder how to get a good price for your trade-in.
You probably have heard it already that leased cars have set distance limitations. However, they work perfectly for people who do not drive much. If your travel requirements are demanding, then leasing is not the best option for you. In this case, you can check the additional fees for every extra mile covered to identify a good deal.
Leasing could help you build a great personality image and also offer you a stable and predictable lifestyle with the new cars on offer at the dealership. If your budget allows and your mileage needs are within the limits, then go right ahead and lease your dream car.