The monthly price tag on a set of new wheels is one of the biggest determining factors for buyers. Unless you have a hefty down payment, leasing is almost always going to land you a significantly lower monthly payment. Even though you aren’t building equity in the car, you’ll have a much better cash flow every month and let’s face it…most people don’t pay off their car loans completely and receive the equity anyway. The majority of buyers trade in or sell their vehicle before their finance term is up, then they finance a new vehicle with the same monthly payment or higher.
Car leasing deals often require only a small amount of cash down, if anything. Many deals don’t require any down payment at all, making it easy to just visit a dealership, find a car and drive away. If you finance a vehicle through your local bank or credit union, they may have their own down payment requirements, especially if you have limited credit. Sometimes it’s as high as 20%, which many borrowers don’t have available.
If you’re on a strict monthly budget and don’t want your car payment eating up all of your income, leasing is the cheaper and better option for you.
Constant New Vehicles and Flexibility
Another major benefit, and the reason many people lease, is because you get a brand new car every few years. Car companies are always coming out with new or updated models, but it would be too expensive to purchase a new car constantly. With leasing, you are able to improve your quality of life by getting a new vehicle every couple of years depending on how long your lease term is. Having this sort of flexibility is a huge bonus. If you lease a nice sedan and then decide you want to expand your family, you can make your next lease a larger SUV. If you have a 4-wheel drive SUV because you live in a cold state with lots of snow then decide you are moving to a warmer state, you can make your next lease a sedan or convertible. The possibility are endless.
A new vehicle every few years also dramatically reduces the chances of running into major car repairs. Depending on your lease term and mileage, your car will most likely be under warranty for the entire duration of your lease. Newer vehicles have less of a chance of needing car repairs but if you do happen to need something done, it’s usually going to be covered. When you finance a vehicle, after the warranty expires you will have to pay for these costs out of pocket.
When you purchase and finance a vehicle, you are responsible for handling the sale or trade-in of the car once your term ends (or before your term ends if you decide to get into a new vehicle sooner.) Selling a car is quite a process. You need to determine a value, advertise it, then meet with potential buyers to show them the car. When you find a buyer, you have to use caution to make sure you aren’t getting scammed, as sometimes buyers can provide fraudulent checks. With leasing, when your term ends you simply visit the dealership, drop the car off and choose a new vehicle. They take care of the cleaning, advertising and selling for you. For people with busy schedules who don’t have extra time to spend selling their vehicles this is the obvious choice.
Leasing a vehicle is an extremely easy, flexible, and affordable option. The monthly payments are significantly less than purchasing and it provides an easier, more seamless experience for the buyer.