If you’re in this position, consider car leasing. It gives you the chance to drive the newest model, paying for it all the while, before you trade it in for another car. It’s similar to how you probably pay for your smartphone. Here are some of the pros and cons to leasing your car rather than buying it, to help you decide if leasing is right for you.
Payments for a leased car are cheaper than payments for one you buy. The reason for this is that when you take out a loan to buy a car, you have to pay down the entire cost of the car. When you lease the same car, you only have to pay the amount the car’s expected to depreciate over the terms of the lease. So, since the total amount you’re paying is lower, the payments are lower.
For example, if you were to buy a $39,000 car with a 36-month loan, you’d pay about $1,084 each month (not counting any down payment). If you leased the same car for the same 36-month span, and it was expected to depreciate by $18,000 over that time, you’d pay $500 each month.
The increased payments for buying a car provide the obvious benefit of owning the car. When you lease a car, you get to pay less, but you also have to return the car after the terms of the lease (though you do have the option of buying it then).
When you lease a car, you have a pretty concrete idea of what it’ll cost while in your possession. You have the depreciation value to pay, plus normal maintenance, like oil changes and tire rotations. Otherwise, you’re usually set because the term of the lease will usually fall within the term of the warranty for the new car. That means most unexpected repairs are covered.
The maintenance of a leased car is especially important. If you don’t properly maintain the car, you may incur some fees after the lease is over. You’ll want to keep it well maintained anyway to give yourself the best experience, but this is something to keep in mind.
3. Newest Features
Much like how cell phone companies and providers offer ways for you to use the latest iPhone or Galaxy phone, leasing a car means you can experience the latest in vehicle technology without having to fully pay off your current car first. You don’t have to worry about waiting to try new features years after they’re out of date, and you’ll continually be able to upgrade to the newest model.
If anything, a con to this might be that you don’t own the car, but ownership could mean you’re driving something with technology that isn’t as safe, as reliable or that’s being phased out.
Whether you lease or buy a car depends on your situation. Everyone’s different, but for many, leasing a car will provide an easier, more affordable path to driving a new car. After carefully weighing the pros and cons, you just might find that leasing is the best option for you.