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Since the days when leasing cars became a thing, they have gotten a bad wrap compared to buying a new car. Many people don’t fully understand the terms that come with signing a car lease and because of that they shy away from them thinking they are a bad deal. However, for many people, leasing is the better option compared to buying. Below are some of the top myths about car leasing.
Car Leasing Myths
•Leasing Is A Bad Deal- If you buy a new car and keep the car past when you pay it off, buying is the better deal. However, most people don’t keep their new cars that long and end up trying to trade it in towards a new, better vehicle. When compared to this, leasing is a much better deal financially because you will only have to pay the taxes on the time you have the leased vehicle and no down payments are typically required.
•No Tax Breaks- It used to be that only businesses could get tax breaks from leasing vehicles. These days, however, all individuals are able to get a tax break from signing a car lease. When you lease a car, you will only have to pay taxes on a portion of the value of the vehicle while you are using it. Also, you won’t have to pay those taxes upfront because the amount will be divided between your monthly payments.
•Hefty Fees- Many people are afraid to lease a car because of the penalty for going over the allotment of miles you are given to drive. However, when you buy a car and go to trade it in for a newer car, you will also be penalized for higher mileage and get a lower trade-in value. Additionally, many car dealerships will work with you to negotiate a higher mileage limit.
•You Are Stuck In Lease- Another myth that people associate with leasing a car is that once you sign the lease you are stuck in it until it ends. In reality, you are equally as “stuck” in a car loan as you are a lease, maybe more so. If you want out of your lease before it is over, you might be able to trade your lease and be matched with someone who will buy your remaining lease term.
Top Benefits Of Leasing A Car Versus Buying
•Low Monthly Payments- One of the biggest benefits of leasing a car is that you will get much smaller monthly payments compared to when buying the same car. The reason that lease payments are smaller is because you will only be paying for the value of the vehicle during the lease term and not for the whole car’s value in full.
•Low Or No Down Payment- Another great benefit of leasing a car is that most people don’t have to put down a down payment. This will mean more cash left in your bank account. When you buy a new car, you will most likely have to put a big down payment down in order to secure the loan.
•No Trade In Worries- Chances are good that when you buy a car you will want to trade it in for a new one before you are even done paying the loan off. Because of this, you will have to worry about getting a good deal on your used car. This is not a worry when you have a leased vehicle. Once the lease is up, you will be able to easily trade it in towards a new leased vehicle or have the option to purchase the car if you want to.
•Easy Maintenance- When you buy a car, you will be in charge of paying for all maintenance issues out of your own pocket. This can add up significantly over the years. Most leased cars fall into the manufacturer’s warranty on the car. This means that you won’t typically have to worry about fixing anything that goes wrong mechanically. Most car dealerships will also offer their customers free, routine maintenance on leased vehicles as well.
•New Cars Often- If you love having the latest and greatest car technology, then leasing is the ultimate way to go when getting a new vehicle. Leasing means you will have a new car every two to three years. You will never have to go without the newest safety features or technology upgrades.
•GAP Coverage Included- When you buy a car, you will have to purchase GAP coverage separately. This means more out of your pocket on top of your higher monthly payments. When you lease a car, GAP coverage is usually included automatically. This coverage will pay any amount that your insurance won’t cover if you are in an accident that totals your leased car or if the car gets stolen and isn’t recovered.