Lower monthly payment
One of the biggest benefits of leasing a car is that it allows you to get a car at a monthly payment that is much more affordable than if you were to buy the car. For example, you might be able to lease a $30,000 car for $300 a month for three years with little or no money down. That same car, even if you put $5,000 down and get a 3 percent interest rate, would cost you about $450 a month for five years. And by that time, the car will be worth much less than you have paid for it.
Many states require you to pay the full sales tax amount of your purchased car upfront when you register it for the first time, and even in states where you are allowed to roll the tax into your payment, it adds a significant amount. The bog tax advantage to leasing is that you only pay sales tax on the capitalized amount of your lease. So considering the previous example, you would pay sales tax on $10,800 rather than on $30,000, which is a considerable difference.
Most leases last either two or three years, which means your car will remain under warranty the entire time you own it. This can lead to predictable ownership costs because you know you will have your monthly payment, gas and regular maintenance. You won’t have to worry about costs for fixing something that breaks down.
Cheaper maintenance costs
New cars have cheaper maintenance costs in general than older ones, so you will save money there. Many lease deals include general maintenance such as oil changes for free, but even if your deal doesn’t, by not owning the car for very long, you avoid maintenance tasks such as replacing the tires and replacing brake and transmission fluid.
When you lease, you are getting a new car that has the latest safety and comfort features, which is a huge advantage. Switching to a new car every two or three years means you will always have the newest and best features the car company has to offer.
There are some drawbacks to leasing that you would be remiss not to consider. Leases limit the amount of miles you can drive, usually to 10,000 or 12,000 a year, so if you have a long commute, leasing may not be the best option. You also have to return your car in good condition, so if you have picked up large dents or scratches, you could face penalty fees. Also, you have to consider the fact that you are basically renting the car for two or three years, and once the lease period is up you will either have to lease again or buy the car. This can lead to a cycle where you are always making monthly payments for a vehicle.
As you can see, there are many advantages to leasing that can make it a very attractive option for getting a car. Be sure to weigh these advantages against the drawbacks of leasing to ensure it is the right decision for your situation.