Most people think there is only one way to pay for a car. Regardless of whether or not the car is paid for in cash up front or paid off over time on a loan, most people only see this avenue of purchasing a car as the option at hand for paying on a car. However, there is another option to paying on a car that ends up saving a lot of money for people in the long run, and that is by leasing a car instead of purchasing it. There are many benefits to leasing a car, and here they are for your consideration.
No Need to Pay for Services and Maintenance Tasks
Owning a car is great. However, there are a few downsides of owning a car, one of which means having to pay for services and maintenance tasks. The parts and labor for these sessions alone can break the bank for some people, depending on what causes the bill to exist in the first place. Most cars that are leased come with a manufacturer’s warranty that will cover services and maintenance costs. While most people end up paying nothing for repairs, this warranty might have instances where people need to pay a little money from time to time for maintenance tasks like having an oil change done.
No Need to Pay a Down Payment
When it comes to purchasing a car with a car loan over time, people usually have to put a down payment on the car. Sometimes, a trade-in vehicle can be used in lieu of the down payment, but people who do not have either are generally at a loss when it comes to acquiring a car loan successfully. Gathering this money can take time, and it might seem impossible for some people to achieve. However, leasing a car negates the need for placing a down payment on a car. Note, the need has been removed, but it can still be used. Some people will make a down payment on a leasing contract for the sake of making their monthly payments smaller. Again, it is important to note that this down payment is entirely optional.
No Need to Pay Taxes and Tag Fees
In a situation where the car is being purchased to own, certain fees have to be paid up front or be considered as part of the loan’s final costs. These fees and taxes can add hundreds of dollars to a final total for a vehicle, but going with a lease means being able to avoid paying these taxes and fees. It is important to note that these fees do not totally disappear if someone wants to go from leasing the car to purchasing the car at the end of the leasing period. These fees are likely to reappear at this time. However, people do not have to purchase a car at the end of their leasing time frame. They can decide to lease the car again for another period of time, or they can move onto leasing another car instead.
Looking at What Makes a Monthly Lease Payment
There are a few factors that go into generating a monthly lease payment. The first thing to consider is the vehicle’s retail value at the time of purchase. People who want to lower their monthly payments should look into leasing a car that has a lower retail value as there will be less money to pay back over time. Another factor that is included in the monthly payment for a car to be leased is the residual value. This value represents how much depreciation the car will lose over time. A car that will have a higher residual value will end up costing less each month. However, it is important to note that this situation also means that the care will depreciate faster over time, so its value will decrease exponentially. This situation can be troublesome for people who want to purchase a car at the end of the lease because it means the vehicle will not be worth as much should the person end up selling the car after it has been purchased at the end of a leasing period.
Look Out for Those Set Miles
One of the things to be most concerned with are the limited set miles that are in the lease’s contract. This limitation is set to prevent the person leasing the car from going over a set number of miles. If this number is breeched, then a fee will be charged per mile that goes over that limitation. This fee can be rather expensive, so people who lease cars need to be weary of the number of miles they drive.
There are many benefits to leasing a car. It is little wonder that more people are going after leasing a car instead of purchasing a car outright or with a car loan.