A man likes possessing assets. Anything he likes, from the very basic things to the luxury items, he wants to have it. However, they all come at a price, and if you haven’t got it, you cannot have or enjoy them. To enjoy driving a classy car, for instance, you have to buy, lease, hire or borrow it. Compared to purchasing, leasing a car seems to be a complicated process for the inexperienced. For the experienced, however, leasing is an interesting endeavor with numerous benefits. If you are new to car leasing, you can access the services of the car upon payment of a considerably small amount and then pay consequent monthly installments for a particular period, say two to three years. With leasing, you can expect to enjoy the excellent services of a new car after every lease period. Hence, leasing is a great idea to consider if you want the service of a new car for a fixed duration of time.
Benefits of car leasing
1. Down payment requirement
Leasing often needs a small or no down payment at all. Most car leasing options do not require an upfront amount. However, others, mainly promotional leases, require a little down payment to seal the deal. You only pay for the first month’s lease payment sum plus a registration fee. Therefore, it frees up capital to commit to other profitable projects. However, you may opt to make a down payment or trade in, which works to reduce your monthly lease payment amount. On the other hand, you have to pay a sizeable down payment to take out the car when you opt to buy.
2. Lower monthly lease payments
Leasing only requires you to service the car’s depreciation over the lease period. It just means that you only have to pay just a portion of the total value of the car. As a result, the monthly payments of the vehicle are considerably lower than the typical monthly installments while buying a comparable car. They are 30-60% lower than those associated with a car loan. Besides, you are not expected to pay any extra costs in the name of investing in ownership equity.
3. Enjoyment of high-tech and safety featured cars for less
Leasing accords you the opportunity to get a new vehicle every few years. Each of them has the latest and up-to-date auto tech, safety features, fuel economy functions, and performance advancements. It, in turn, translates to driving a better car for less compared to buying, which could cost you a lot more to enjoy similar features.
4. Better value for your money in the short run
Since leasing has low monthly payments, you get more of the car services at its best for at a relatively low cost. While buying, it is usually for the long haul such that you will still require the services of that vehicle even when it is old at a well-depreciated value. However, the leasing option gives access to the services of a luxury car for the same or lower cost than you would get with the purchasing option.
5. Reduced maintenance costs
The leasing period of a vehicle mostly coincides with its warranty period. For this reason, the new leased car is always covered by its manufacturer for repairs and maintenance as opposed to a purchased car. Besides, some of these car companies offering the lease may provide free and routine maintenance that are scheduled all through the lease period. You only incur the costs of daily maintenance, say lubrication costs, while all maintenance costs of a purchased car are borne by the buyer after the expiration of the warranty duration.
6. Lower sales tax
Sales tax on a leased vehicle is not charged on its full value as it is with purchased cars. Your tax is limited to the amount you use during the lease period. It is also spread out and paid together with the monthly lease payment, which reduces its financial impact on you.
7. No worries about the car sale
Selling a used car is a hassle and a nerve wrecking endeavor that you can avoid when you go for car leasing arrangement. With the ending of the lease period, you just turn it back to the leasing company and upon evaluation of the observation of rules and regulations, the mileage, and maintenance, you simply walk away.
8. GAP cover
Most leased cars have an automatic free GAP protection in their contracts. In the case of accident occurrence or a theft case, it pays off your vehicle if your insurance fails to cover the full loss. For a car purchase, you also have to buy the GAP protection separately.
Car leasing is an excellent alternative to purchasing. It is an economical option when considering the initial cost and the reduced monthly payments. In other words, it is a financially sound alternative since you can invest the saved amount in other income generating projects. More so, it supplements your lifestyle by offering you quality vehicles that you would possibly not obtain to buy a similar car. Besides, a car depreciates whether in or out of use. Hence, leasing is a considerably better compared to car buying.