The process of leasing a car has changed dramatically in the past few years. It was once something offered primarily to corporate buyers and saved for luxury vehicles, but now it’s offered almost everywhere. It’s just as easy to lease an affordable compact car as it is to lease a luxury SUV with a six-figure price tag. The problem is many consumers are unaware the many benefits leasing provides. It’s not perfect for every buyer, but it’s almost always a more affordable and appealing way to shop for a new car.
When You Shouldn’t Lease
The biggest drawback to leasing concerns mileage. The only people who shouldn’t consider leasing are those who put more than 15,000 miles per year on their car. The average lease contract contains an allowance of 12,000 miles per year, but it’s easy to pay a little more and ask for the addition miles before you sign the lease agreement. If you drive more than that, it’s going to cost you. It might cost you approximately $1 for every 5 miles you drive over the allotted mileage, which adds up fast. If you average 10,000 miles per year on your car, leasing is a great option. If you put 30,000 miles per year on your last three cars, you might not want to consider leasing as an option.
When You Shouldn’t Buy
Buying means you get to keep your car as much as you want, put as many miles on it as you’d like, and treat it any way you want. It also means you pay the depreciation the moment you leave the dealer, and you spend many years upside down on the vehicle. This means you owe more money on the loan than the car is worth to sell or trade in. It means you keep the car longer, you run out of warranties sooner, and you don’t get to trade your car in for a new one very often. If you like driving a new car, you like keeping your vehicles only when they’re under warranty, and you like not taking a depreciation hit, you might not want to buy a new car.
Leasing Affords You Luxury Cars
If buying a car leaves you with a budget big enough to buy a Honda, you probably don’t have any other options. If you lease a car with your Honda purchase budget, you can make the same monthly payment you would on the Honda for a Mercedes or BMW or Cadillac. Since you’re only paying a certain percentage of the sales price to lease, it’s a lot easier to afford a much nicer and much more luxurious vehicle than it is to drive a car you buy outright.
You Get New Cars At the End of Your Lease
There’s nothing as dissatisfying as deciding it’s time to trade in your current car for a new one only to hear the dealership salesperson tell you your current car is worth $15,000 as a trade. You owe $22,000 on it, and you still have two years to go to pay it off. You’ll never be able to afford a new car, or you’ll need to drop the budget to afford to roll that additional money into your new car. It’s not a nice way to shop, but leasing prevents this. You can lease for an average of two or three years, trade in your car for a new lease, and never worry about downgrading or being told you cannot get a new car because you owe too much on your old one.
The benefits of leasing far outweigh the downfalls. The benefits of leasing also outweigh the benefits of buying, which is why it’s an option many consumers are turning to when it’s time to find a new car to call their own. Leasing isn’t the financial deal it was in the past.