Buying and leasing share more similarities than you might imagine, but that doesn’t mean leasing isn’t worthwhile. Many consumers assume they’re trapped in a lease. They must keep this car, they can’t get a new one, and they have no freedom. It’s true it’s difficult to turn a lease in early or terminate it all together, but it’s no more difficult than trading in the car you purchased before you’ve paid it off. Buying a car means paying full price, and it means taking a hit on the depreciation the moment you drive off the dealership lot.
Leasing a car means you’re paying for the depreciation rather than the entire car, and it means you’re guaranteed a new car when the lease is up in two or three years. If you want to trade in a purchase in two or three years, you’re going to find it’s difficult to sell or trade your vehicle for what it’s worth. If you didn’t put money down when you bought it, you’ll find it’s impossible to get rid of it for what it’s worth. Can you afford to come out of pocket to pay off the rest of this car, or can you afford to roll the difference into a new car? This makes your new car far more expensive, and it might mean you’re not able to finance what you want. There are pros and cons of leasing vs. buying, but it’s easy to see the pros of leasing outweigh any of the negatives.
The Biggest Leasing Con
The biggest issue buyers face with a lease is mileage. If you live close to work and school and keep your mileage low each year, leasing works well. if you drive a long distance to work, or you love to take long road trips, or you drive many miles each day for various reasons, a lease won’t work for you. It typically allows for 12,000 miles per year, but you can negotiate higher mileage allowances if need be. Anyone who puts more than 15,000 miles per year on their car might not want to lease a vehicle.
The Pros of Leasing
The con list is short, but the pro lost is not.
– It’s affordable
– You can choose from more cars
– You always have a warranty
– You get a new car every few years
Unlike buying, there is no reason to pay excessively for a lease. You aren’t paying the full value of the car. You’re only paying for the depreciation the car experiences while you drive it. This means your payment is substantially less expensive on a lease than a purchase, and it means you get to choose from a wider variety of vehicles. That luxury car you never dreamed was in your budget is now more than in your budget. Imagine getting a luxury sedan with all the bells and whistles for less each month than you’d pay to purchase a basic sedan without many features. It’s a great option for anyone who wants to drive something more expensive and luxurious.
The other great aspect of a lease is the constant warranty. You don’t drive a lease long enough for warranties to expire during the timeframe they’re issued, and you won’t put enough miles on it to cause the warranty to expire. You will trade this car in every two to three years depending on your lease agreement. There is no value issue, no trade-in fees, and you never need to worry whether it’s possible to trade in a lease affordably.
Driving a lease is not the taboo subject many believe. It’s a simple process that’s not unlike buying a car. You’re still financing a vehicle, but you’re only financing it for a portion of the price and for the length of time it takes to decide you’re tired of driving it. It’s a win-win situation for most drivers, but be sure you’re someone who can keep the mileage low, avoid excess wear and tear, and keep the car in excellent condition before you sign on the dotted line. Leasing is beneficial for most, but it’s not for all.