For drivers who want a lower monthly payment and want to free themselves of the hassle of car repairs, leasing may be a viable option for their next car. Is it for you, too?
Read on to find out:
Tip #1: Leases Usually Result in Lower Payments
What you’ll find with a lease is that you almost always have a lower monthly payment than you would if you were purchasing the car. There are two key ways experts say you can keep your lease payment down:
- Select a car with a higher estimate for “residual value percent.” This is the estimate a dealership will make to determine the car’s devaluing over time. The car begins to depreciate as soon as you drive it off the lot.
- Select a vehicle with a lower sales price. The lower the price of the car, the lower your monthly lease payment.
Now, there are other costs associated with leasing a car, namely:
- A security deposit
- The first month’s payment
- A disposition fee that you’ll need to pay when you return the car
However, all of these costs combined still are likely to be lower than what it costs to put down a down payment on a car you are financing.
Tip #2: Car Financing Leds to Property Acquisition
Hands down, the best reason to finance a car is that once you make your final payment, it is yours. You can then do whatever you want with your auto because it is your property. A leased car is never your property, unless at the end of your contract, you decide to buy it. Here are some of the things you can do with your car once you own it outright:
- Sell the car
- Trade in the car as a down payment for another one
- Use the car as equity to finance something else
Tip #3: Leases Make Your Driving Experience Smooth and Easy
Perhaps the reason car leases are so attractive to drivers is that they create nearly a seamless experience for the driver. When you are borrowing a car, you don’t have many responsibilities for it. A lease works similarly. When your air conditioning goes out, the dealership is responsible for getting it back online. The car will be new and often is under factory warranty, so you don’t need to worry about much. Most of the time the dealership is going to handle the issues you encounter with your car.
Tip #4: Car Financing Can Lead to Extra and Large Costs
You almost always need to put down cash for a down payment before purchasing a car. Overtime, as your car gets older, you’re going to need to dole out more cash for repairs. That can hit you hard — especially if you realize your car needs a new transmission or a new set of tires. You’ll need to be prepared to take on these costs when things go wrong — and they will!
Let Leasing Make it Easier for You
Deciding on a car is hard enough. You shouldn’t have to add the stress of figuring out a way to finance it. Instead, try leasing a new car with a lower monthly payment—and get out on the road to adventure!