More than nine out of ten families in the United States own or lease at least one vehicle. Cars, trucks, and other vehicles are necessities for living in today’s age. Vehicles are most commonly purchased for indefinite use over its lifetime, or leased for finite times, mile limits, and some other restrictions.
The main reason why car purchases are more popular than leasing is because car leases are often difficult to understand. However, as the suggested retail purchase price of cars continue to rise, proportions of lessees to owners inflate consistently.
Most lessees sign car lease agreements by first understanding what positive outcomes leases can bring to the table. Discussed below are four popularly recognized upsides that car leases boast.
Leasing is Cheaper Than Buying in Respect to Initial Payments and Monthly Installments
Vehicle ownership includes unlimited, untethered ownership to the purchased vehicle. The vehicle’s ownership certificate, referred to as the “title,” is a physical ownership certification. Having a car to one’s self sounds pretty nice, but is often far more costly than the benefits of purchasing a vehicle.
Leased vehicle prices are largely based on the expected amount of depreciation to be tacked on throughout the upcoming lease term. Such drops in value are adjusted in favor of dealerships with interest to account for the time value of money, or change in a dollar’s worth over time.
Leased vehicles usually require a small, generally cost-effective security deposit as a form of securing a missed payment on their respective leases. Financing purchased vehicles call for hefty down payments, totaling several months’ worth of installments in case the would-be owner defaults.
Lessees are not Required to Deal with the Long List of Hassles Associated with Reselling Used Vehicles
People who lease vehicles are not required to commit to administering both functional and cosmetic repairs. Those who purchase vehicles are (un)fortunate enough to be responsible for repairing their vehicles, or else let their vehicles collect dust in garages, unused. Repairs often cost significant sums of money and repairs sometimes take several days to complete.
Repeat Lessees Have the Privilege of Driving Around in New Vehicles All the Time
Vehicle leases last anywhere from half a year to several years. Most of these leases last only a year or two. Lessees that drive new or lightly used leased vehicles can also afford these leases, because, as mentioned earlier, leases are far less costly than buys. Upon end of the lease term, lessees simply return the vehicle and ask their dealership for a different, newer car to lease.
Regular vehicle lessees can often command more favorable terms than other customers, yielding the result of highly valuable, cost effective leases. Also, any people seen in
new or late model vehicles are typically those who lease new-to-them vehicles regularly.
Lessees are Not Required to Repair Leased Vehicles
Despite car leases being far less expensive than purchasing vehicles outright, lessees have the privilege of returning broken down or damaged vehicles to their respective dealerships to carry out repairs, upkeep, and maintenance. Although retaining ownership of a vehicle may sound nice, having the sole responsibility of carrying out repairs is far from fun.
Leased vehicles are almost always under at least one warranty from either manufacturer or dealership, if not both. Such warranties provide yet another layer of protection to lessees. In the event a lessee’s car breaks down, they are able to use a replacement from their dealership. Car owners are not this fortunate and must seek out replacement transportation by themselves, without help from their former dealerships.