Does Leasing a Car Make Sense for You? Find Out with These Don’t-Miss Tips!
Leasing a car can make sense for your lifestyle if you are wanting to save money without the stress of maintenance that comes with owning a car. Leasing a car also is a great option for drivers who run their own businesses because you can write off a lease payment on your taxes, while you cannot do this with a car payment.
But to get to the point where you are ready to lease a new car, you have to understand the nuances of car leasing vs. buying. Read on to get our don’t-miss tips for making the right decision for you!
Tip #1: Lease Payments Historically Are Lower Than Car Payments
Research shows that several factors work together to make lease payments lower than car payments. The first is that typically you have to provide a down payment when you buy a car. This is not the case with a lease — and you should not put any money down because you are essentially giving your dealer free money.
Leases also lead to lower payments if you choose a car with a lower price tag. This is a defining factor in your lease payment, as is a calculation called the residual value percent. This latter estimate basically determines how much your car will depreciate over the term of the lease. A higher residual value means the car will keep more of its value, so your lease payment can be lower. After you turn the car in, your dealer will sell the car and make more money off of it as a used car.
Tip #2: Leasing a Car Means You Don’t Pay for Most Repairs
This is a huge convenience and selling point for drivers. Typically, most repairs to a leased car will be covered the dealer and your car’s factory warranty. Because most leases are three years or less, you’ll have a car that remains fairly new.
Now, you will have to pay for expenses such as new brakes or tires during the lease term — so purchasing an extended warranty to help cover the cost pay be a good option to consider.
Tip #3: When You Lease a Car, You Can Lease Luxury
What’s so interesting to learn is that most luxury cars are leased! If you can’t afford to buy a Lexus, you can lease one — and for a much lower monthly payment than you would if you were financing it to own. Best of all, at the end of your lease term, you have the option of going forth with purchasing the car or leasing a brand new luxury car. The choice is up to you — and what works for your lifestyle — and bank account — right now.
Don’t Miss Out by Waiting on Your New Car Lease
When you are on a budget, sometimes purchasing a car — complete with a hefty down payment and monthly payments as long as five years — just isn’t an option. The good news is that a car lease can get you what you want for less money. Leasing doesn’t work for everyone, but under the right circumstances, it could save you money, frustration and unnecessary expenses along the way. Keep in mind your timeline for making payments on a car–three years or less on a less vs. five years on a car, the latter which you’ll own.