Paying cash is not the only path to getting a new vehicle. While leasing was once reserved for luxury vehicle buyers and corporate customers, it is now open to every aspect of the vehicle industry. College students, families, and people from every walk of life lease vehicles. Leasing now accounts for 33 percent of all vehicle sales.
The Benefits of Leasing
Leasing offers individuals an opportunity to secure a more expensive car than they might have otherwise been able to afford. When leasing a vehicle, individuals only finance the vehicle’s depreciation that will occur during the lease term, plus additional fees. The lease term is generally three years. The person leasing then returns their vehicle at the end of the lease. Lease payments are typically lower than a monthly loan payment unless the person leasing puts a lot of money down, or their trade-in had a high value.
Anyone who can only afford a small down payment may benefit from the lease option. Leasing is an excellent way to predict the total cost of vehicle ownership. Since the lease is usually for three years, the leased vehicle is covered by a typical three-year warranty. The warranty can cover unexpected repairs. Lease owners should maintain their vehicle with oil changes, tire rotations, break servicing, and other needed maintenance.
Leasing also gives consumers an option to get the newest high-tech gadgets and safety features. Of course, there is no worry of having to get a good price for a trade-in. Consumers who love leasing can look forward to driving a new car every several years.
Drawbacks of leasing
Some consumers feel a bit restricted by the number of miles allowed before their lease imposes penalties. Drivers should estimate the number of miles driven each year to stay within acceptable limits of their lease. If there are any alterations to the vehicle, they should be easily removable. Otherwise, the individual leasing may be required to pay to return the vehicle to its original condition. Every lease has different terms and conditions, so it is important to read the fine print before signing on the dotted line. Additional fees may apply if the vehicle is not properly maintained during the lease.
Benefits of Buying
Anyone looking to keep their vehicle’s value for a long time can benefit when buying. They own their vehicle outright. The only costs to consider are maintenance and insurance. When buying, there are no restrictions placed on mileage. This may benefit anyone with long commutes to and from work.
Drawbacks of Buying
One obvious drawback of buying is the sizable loan needed for the down payment. Depending on the dealership and the buyer’s credit, the buyer may have to put between 10 and 20 percent down to drive the vehicle off the lot. Saving up that amount of money can be a challenge for some people. Many people with tight budgets often extend the length of their loan, which can create additional costs. The vehicle payment could end up feeling like a mortgage payment. Then, there are the unforeseen maintenance costs that could surface at any time while still paying on the car loan.
Buying or leasing is a personal decision. For millions of people, leasing fits into their lifestyle of being able to drive a new vehicle every three years or so. Anyone new to leasing, or even if a seasoned pro, will find that leasing a vehicle offers a plethora of benefits and options.