In this economy, it’s easy to feel frustrated with how far your money will go. That doesn’t end with purchasing a car. There are many things that have to happen to get you to the point of being able to buy, such as selling your current car and saving for a down payment, which can cost thousands of dollars
What many people may not realize is that leasing a car can save you money in the long run if you choose an economical car and choose a short-term lease less than three years. It’s actually more economical to purchase a car if you are going to keep it for longer than a lease if you can pay it off in five years or less. You then will be able to sell it and use it as equity.
But if you are short on cash, then leasing a car can give you the option of driving a brand new car for an economical price.
Read on to get our top tips for leasing you next car!
If you don’t have a lot of cash in savings for a car down payment and you drive much less than tens of thousands of miles on your car per year, then leasing a car may be a good option for you.
Remember that leases often have mileage limits, so that option may not be a good one for you if you find that you have to travel constantly in your car. You don’t want to be charged fees for putting too many miles on your leased car. There are many other great benefits of leasing a car, however.
Consider these pros and cons of leasing a car:
- PRO: Lower lease payment each month when compared to a car payment
- CON: You don’t own the car
- PRO: You can often drive a luxury vehicle because they often have high residual values, which dealers use to estimate the car’s devaluation over time. This rate contributes to a lower payment.
- CON: You cannot sell the car because you do not own it.
- PRO: You can write off the lease payments on your taxes if you use the car for business.
- CON: You’ll likely have a mileage limitation with a leased car.
- PRO: The dealer covers most repairs, minus tires and breaks.
There are several pros and cons to buying a car as well that you’ll want to consider in the process of searching for a new car, including:
- PRO: Build equity with an asset you own. You can use the car as collateral once you pay it off completely.
- CON: Have a higher monthly car payment. This is typically true in cost comparisons between monthly car and lease payments.
- PRO: Own the car. This is something that will never happen with a lease, although you do have the opportunity to purchase a car you lease at the end of your contract.
- CON: Pay for all repairs associated with car maintenance.
- PRO: Sell the car.
- CON: Pay a down payment.
Get Ahead by Leasing a Car Today!
There are few things worse than feeling like you are wasting your hard-earned cash. Put away a few dollars and drive a new car by leasing your next car!