Leasing a car comes with a myriad of benefits many people are unaware this form of financing provides. As much as you might think you know about leasing, it turns out people who haven’t done it in the past aren’t as familiar with it as they assume. Many consumers understand it’s a version of borrowing a car for a monthly payment, getting a new one every few years, and driving very little to keep the mileage on the car low. What these consumers don’t realize is how these things are beneficial, and they aren’t aware of the many other benefits associated with leasing.
The Benefit of Low Mileage
Leasing a car means agreeing to keep the mileage low. The dealer financing this deal wants this car back worth as much as possible so they can sell it as a certified used car to another buyer. They want low miles, and they want the car in excellent condition. What many consumers fail to realize is they have the power to determine who many miles they put on this vehicle. Buyers might want to stick with 10,000 miles per year, go with the more standard 12,000 miles per year, or they might decide they want to ask for 15,000 miles per year and negotiate a slightly higher monthly payment to do so.
If you’re thinking low mileage is a deal breaker for leasing, you’re not considering the entire picture. High mileage is damaging when you lease and buy a car. When you buy a car and put more than the standard number of miles on it each year, you decrease the value of the car significantly. Let’s say you have two cars identical except for the miles. They’re both two-years-old. One has 18,000 miles. The other has 45,000 miles on it. The one with fewer miles is going to be several thousand dollars more expensive, because it’s more valuable. The one with high miles is going to sell for a lot less, because the warranties are almost up, the car has too many miles, and it’s less valuable.
Now imagine you are trading that high-mileage car into a dealer for a new car. You’re never going to get what you owe on it, and you’re not even going to get a dollar amount that’s remotely close. You’re further upside down on the car, which means you owe more on it than it’s worth. High mileage is dangerous on any car, not just on leases you must turn in.
The Benefits of Financing a Lease
Financing a lease works like financing a purchase. You still apply, your credit is checked, and you go through all those same financial motions. The difference is you pay a lot less for a lease. You’re not paying the full price of the vehicle you want, so the sales tax is much less. You’re only paying a small portion of the value of the car, which means you’re not paying a high monthly payment.
You’re paying such a low payment you get to choose a much nicer, much more expensive car. Leasing often allows consumers to choose a car they might not be able to drive otherwise. What’s outside the monthly payment budget on a purchase is well within the monthly payment range when you’re talking about a lease.
The Benefit of Driving New Cars
The average lease lasts two to three years. You’ll get a new car each time you turn your old one in when the lease is up. Provided you’re able to keep your mileage under the agreed number and the condition of your vehicle is great, you turn it in without putting any money into it. You don’t pay any fees, and you get to choose a new car. There is no hassle with the trade-in process. The lease officially belongs to the dealer, and you’re coming in to lease a new car without the burden of a trade or a car you still owe money on. This makes the process so much simpler.
You also always have a new car with warranties. If any major issues occur, you’re not financially liable for them. The warranties the car carries pay for those. The even better news is your car probably won’t have any issues. It’s always new, so you don’t worry about the traditional issues that occur when you keep a car for a long period of time.
Leasing is beneficial for so many buyers, and the benefits are becoming more apparent as people are leasing more now than ever. It’s not what people thought it was, and it’s more beneficial than many consumers realize until they see for themselves just how much money it saves and just how much more they receive with a lease rather than a purchase.