Your vehicle will be an important part of your life, so the one that you choose is a big decision. Part of that decision will be whether one should purchase a vehicle or lease it. There are a lot of circumstances in which leasing a vehicle will probably be the preferred option.
Make Good First Impressions
If you are thinking about meeting colleagues, business ventures or even going on dates, first impressions should be on your mind. Leasing a vehicle is typically cheaper than purchasing one because you are not paying for the entire price of the vehicle. For that reason, you can usually afford to get a better model on your budget. Further, leasing companies usually have a large selection of upscale models for their residual value (the value of a vehicle after it has depreciated).
Better For Short-Term Visas
If you are in the United States on a temporary work contract and you are not sure if you will return to your home country, leasing will probably be the better option for you. A commitment to long loan repayment plan would be unnecessary. You could just lease a vehicle for the amount of time that you know that you will be in the United States and then make long-term decisions once you know what the future will hold.
In fact, the same principle would apply to anybody who is in a temporary situation. If you are a college student, you might want to upgrade your vehicle after you graduate. If you are a US citizen and have a temporary work contract, a long commitment to loan payments can be a daunting prospect.
Concerned About Repairs?
Buyers probably avoid purchasing a vehicle directly from an owner because they are not sure about the condition. Many opt for leases because they know that typically, they come with a warranty. The leasing company will usually cover the cost of repairs (and maybe even maintenance depending on the warranty).
Some may think that only businesses get tax breaks on leased vehicles. But individuals do too. If you are buying a 2017 Nissan Altima, then you will have to pay taxes on the full price, which is nearly $23,000 (or more depending on the configuration). If you were to lease the Altima, you would still have to pay property taxes. But you would only be taxed for the lease, not the price of the vehicle.
Is This An Emergency?
Perhaps you were in an accident, your vehicle broke down or it was stolen. This is yet another situation when leasing would be the better option. You will typically only have to pay the first month’s payment and a few minor tax fees. When you actually buy a car, you will need an initial down payment, which could be up to 20% of the value of the car. Some may be tempted to buy a cheap car because it is an emergency situation. But then you are essentially leaving yourself and your family crippled for the next few months or years while you have a substandard vehicle. But if you lease a car, you can actually upgrade and still pay significantly less than you would if you were going to buy it.
The wisdom in leasing a vehicle applies in several different situations, especially if somebody cannot make a long-term commitment to loan payments. But as a rule of thumb, leasing is a good alternative for anybody who wants to save money.