If you find yourself in the market for a new vehicle, you might wonder what leasing is all about. You’ve heard of it but unless you’ve done it before, you probably aren’t entirely certain how it works. Leasing is not unlike the process of buying a new car, but it does offer you far more options in terms of what you get, how much you pay, and how often you drive a new car. Like buying, you get to choose what you want to drive when you lease a vehicle. You sign paperwork to finance the vehicle once your credit is checked, and you make monthly payments on the vehicle for a predetermined number of months.
The big difference comes at the end of your payments. When you buy a car, that last payment means you’ll receive a title to the vehicle in your name. It’s yours free and clear to do with what you please because you own it. When you lease a vehicle, you are done making payments on it, the car belongs to the dealership once again, and you get to go into the dealership to find a new car to take home. Unlike buying, you aren’t negotiating a trade-in deal. You aren’t rolling over money you still owe after the trade-in value is established, and you aren’t being told you still owe a lot more than the vehicle you’re bringing back is worth. You get a new car, you get to sign new paperwork, and you get to go home in no time.
Leasing is highly beneficial to almost everyone on the road. The only time it’s not such a feasible option is when drivers put excessive miles on their car. Excessive miles means more than 15,000 miles per year. These drivers are better off buying a new car so they aren’t required to pay a per-mile fee at the end of the lease for every mile over the contracted mileage. Buyers beware, though, because you’re still paying for those excessive miles in terms of the overall value of your vehicle when you go to sell it or trade it in.
Leasing is Cheaper
When you lease a car, you pay less for the car. This is a simple fact, and it’s one of the most intriguing aspects of car shopping. You buy a car for less each month because you’re only paying a small portion of what the car is worth. When you buy a car, you pay for the entire car. When you lease, you basically pay to rent the car for a few years.
Leasing Allows You To Drive Cooler Cars
When you buy a car, you are limited to what you can take home. Your car must fit into your budget. It must fit into the overall budget and the monthly payment budget, which means a relatively cheap car is going to come with a high monthly payment. When you lease, you get to pick more expensive cars for a lower monthly payment. This means you can double your overall budget in many instances since the new luxury car fits better into a lease budget than a compact car.
Leasing Comes with Fewer Fees
You do pay sales tax, but only on the amount you finance when you lease. This can save you thousands upfront. You also needn’t put down a large down payment, if you are even required to put down any down payment. You needn’t worry about dealer fees, finance fees, or any other fees with a lease. In fact, some leases even come with free maintenance over the life of your loan.
Leasing is a stellar option for those who want to save money driving a nicer car. It’s good for those who like change, who want to drive a new car every two or three years, and those who don’t like the commitment of car ownership. It’s like renting, but long-term.