The pleasure of a new car can often be clouded with financial statements. A big decision that car shoppers are plagued with is that of leasing or buying a car. For those who have never leased a car, leasing can seem confusing and complicated. Leases can seem confusing, but most of your perceptions of leasing are probably outdated.
Read the following benefits to leasing a vehicle over buying:
- Pay lower out-of-pocket costs. Leasing requires little or no down payment and there are no upfront sales tax payments. Leasing essentially means you are renting a car for a fixed number of months, so you are only paying for the car for that period of time. For business owners, leasing a car can offer tax advantages if the vehicle is used to for business purposes.
- Beat the banks. Leasing is a great alternative when buying a car is not an option. Most banks will not lend you more than $30,000 (£18,750) to buy a car. If you are trying to acquire a car for more than that amount, leasing can make it possible.
- Drive a new vehicle. A great point about leasing a new vehicle is that you are always driving new. Leasing a car also frees you up from a depreciating asset. Car payments typically take about 5 years to pay off; with a car lease, you aren’t making a long term commitment, about 2-3 years on average.
- Lower your monthly payment. Monthly payments are comparatively lower when you lease a car. The obvious downside of buying a car is higher monthly payments. When you lease you are only paying for the depreciation of the vehicle for a fixed number of months. The leased car will typically be under factory warranty in pricing as well.
The ultimate decision of leasing or buying a car always falls under personal circumstances. The drawback of both leasing and buying a car is that you will always have a car payment. Most leases restrict your mileage. If you are someone who drives a lot during the year, ask about an open-ended lease so your miles will not be restricted and you won’t face penalties for going over. Feel good about your decision and enjoy your new ride.