You have the option of paying for a car or leasing it when you think of getting one. There was a time when leasing was convenient for select groups such as luxury car operators and corporate companies. The increase in the number of people who lease their vehicles today can be traced to the increase in the prices of vehicles. Leasing has grown to account for 30% of total vehicle sales each year. There are many benefits to leasing a car and why it is better than buying one.
Lower Monthly Payments
The money that you pay is relative to the depreciation in the value of the car over the lease term whenever you lease a car. The average duration for leasing a car is three years. You simply have to return the car to the dealership when the period is over. You have to fork out the entire amount of purchase over the period when buying a car. You are also required to pay a down payment and a trade-in value. The cost is higher than the price that you will pay when you lease.
The only instance where the monthly loan amount will be lower is when you pay a large deposit or when the value of the trade-in is high. The difference between the price of the car at the end of the period and its current price in the case of a car lease is what you will pay. The monthly payments of a lease are several magnitudes lower than getting a loan to purchase the car.
Minimal starting amount
The down payment that you require to pay at the start of the lease is a small amount. The price ranges from zero to a few thousand dollars that make it very convenient. The down payment that you pay up front will determine the monthly purchases that you make. A high down payment means that you will have an easier time paying the monthly costs each month.
You have to pay a higher down payment when you purchase a car because it is calculated to the full price of the car. There are other additional fees and capital outlay that will cause you to pay higher. Road tax is a fee that has to be paid for every motor vehicle to use public roads. One has to pay for this amount when you buy a new car. This is covered in the lease.
The length of the lease presents many advantages to the owner of the car. Three years is also the length of the average car warranty. This protects you as the owner from additional costs. You can be assured that you will not fork any money towards repairs during that period because it will be covered by the warranty. The responsibility of the owner will be to make sure that the vehicle is well-maintained. You might not need to cover this cost in some cases because it could be covered under warranty. This means that one will be able to come up with a round total of all the expenses that they will incur from the onset.
A car is usually in its best shape during the first couple of years. The good thing about leasing is that you get to enjoy a new car. It is convenient because you will not be bogged down by car problems every time. You are also more likely to get a newer car model with improved features and performance. A new car is efficient and uses less fuel than an older car. It saves you from using up additional costs because you are assured that performance is optimum. You can return the one you have and lease another new car when the car lease is over.
Leasing allows you to afford a car that might be said to be out of your price range. This is possible because of the lower deposits that you are required to pay. This is advantageous if you are going to use the car for a specific purpose. You will be able to acquire a car to suit your purpose without paying the full amount for it.
How to Choose a Car
Many popular cars are available on the personal lease market. This means that you will not have limited options when choosing which vehicle to get. It is advisable to consider vehicles that depreciate the slowest when making a choice. The vehicle should lose as little value as possible during the term of the lease. The residual car price will still be high at the end of the lease that is better for you. The amount that you pay each month will be lower when the difference between the prices before and after the car lease is calculated.