Leasing a vehicle involves paying monthly installments to satisfy the amount of wear placed on the vehicle. For example, let’s say Michael J. Fox’s DeLorean – no, not the real DeLorean, silly – is worth $15,000. Michael was leased this vehicle for one year. Following the end of its lease term, in one calendar year, the value of the DeLorean is expected to fall to $12,000. Michael is responsible for paying the $3,000 difference along with interest. In practice, leases are nearly equivalent to renting, with a few added nuances.
Buying a vehicle involves the transfer of items of value, most always currency, for a vehicle. The now-owner is given total ownership of the vehicle upon payment. The owner can do whatever he or she wants with the vehicle: modify, paint, add set covers, or even disassemble it. The car owner is equally responsible for any damages done to the vehicle, along with repairs and maintenance. Conversely, lessees are not required to upkeep mechanical components of a vehicle: simply keep the body and interior clean and free of stains and tears.
Listed are several reasons detailing why leasing is a better deal than buying a car.
Leases are Less Expensive
Lessees essentially pay for depreciation tallied on their leased vehicle for a finite period, whereas owners pay for the entire car, intended for indefinite use. In the $15,000 DeLorean scenario, paying $3,000 with interest is obviously far less than paying $15,000 straight-up.
Not only are security deposits, total payments for lessees, cheaper than down payments, required when financing the purchase of vehicles.
When considering the cost of repairs and maintenance for a car owner’s vehicle, the price of a leased vehicle is even cheaper than previously considered.
Lessees Never Worry about Resale Potential
Car owners have the liberty of owning and having unlimited rights regarding an asset. However, owning a vehicle for a long time is usually accompanied by the desire to sell that used vehicle. To help keep the resale value of a vehicle high, regular maintenance needs to be performed on owners’ cars. Such upkeep requires owners to regularly work even more, including paying for necessary supplies. Repairs should be administered immediately because leaving repairs for long amount of time may result in lower resale values.
Used car sales hubs are often price-sensitive and regulars are not receptive of fair market values for used vehicles. As such, car owners searching for buyers usually must look around other areas and pay necessary marketing and advertisement costs.
See everything written under this heading? It all seems pretty rough; a no-brainer as to why many people are interested in leasing. Most all car owners outright purchase vehicles because they wish to have exclusive rights and access to them. However, not all car buyers think of the stress, time, and costs related to reselling a used car.
Lessees Can Be Seen in New Cars Year after Year
Many people who consistently drive different new cars as years pass lease those vehicles. Few have enough money to outright purchase brand new or late-model vehicles year after year. As such, people taking advantage of largely beneficial leases can have as much or more access to quality vehicles than their higher-income counterparts.
As identified, many benefits are related to leasing cars that do not come with buying cars. Leasing cars is generally a better decision for most people, rather than the expensive, time-consuming, and responsibility-laden “better decision” we now know as outright buying vehicles.