For most people, buying a car usually makes more financial sense than leasing. However – if a lease turns out to be right for you, then you should be aware of the advantages it offers versus buying a car.
Lower Monthly Payments
Leasing a car usually results in monthly payments that are 30% – 60% lower versus buying a car. This allows you to drive a vehicle that you may not usually be able to afford, and this is perhaps the most significant advantage that leasing offers.
You can return the vehicle at the end of the contract period or you can buy it or extend the contract. Of course, you could also select a new car.
No Hassles with Used Cars
When your lease is over, you simply return the car to the leasing company. No more hassles trying to sell a used car – and the value of the vehicle at the end of the lease is not your problem. There are some cases where leasing companies overestimate the value of the car, which results in a lower lease payment for you and a loss for the leasing company.
No Repair Costs, Low Maintenance
If you follow my advice and only rent for 36 months or less, then the manufacturer’s bumper-to-bumper warranty generally covers you for the full term of your rental. You’ll never have to worry about significant repair costs, and in some cases, manufacturers also offer free maintenance for the first two years.
Drive The Newest Cars
Leasing allows you to drive a new car every 2 or 3 years, allowing you to benefit from the latest technological advances and safety features.
If you intend to use the car for your business, you can generally write off the entire lease payment as a tax deduction. And even if you don’t own a business, most states only tax you on the “use” portion of your lease, which means you don’t have to pay tax on the full price of the vehicle. This can save you a few hundred dollars compared to buying a car and paying taxes on the total amount.
A Greater Choice Of Vehicles
When you rent a car, you don’t have to worry about its reliability or quality because you only drive it for 2 or 3 years. Most cars will have no problems during that time, which allows you to choose vehicles that you won’t necessarily buy.
Ideal If You Are Accident-Prone
If you buy a car and destroy it, the insurance will pay for the damage, but when you sell the vehicle, you will suffer the consequences because of its “reduced value”. People are not willing to pay the same price for a damaged car. With leasing, if you destroy the car, insurance will still take care of it, but the diminished value is the leasing company’s problem, not yours.
Less Money Up Front
Many cars can be leased without a down payment (although there is always an up-front fee that can usually be built into the monthly payment). When you buy a car, you typically have to make a 20% down payment to get a decent car loan rate.
No Resale Risk
The leasing provider generally assumes the residual value risk in standard operating leases, which means that the lessor is responsible for remarketing the vehicle at the end of the lease. It is sufficient to return the car.
Includes GAP Coverage
Most rental contracts include free additional insurance, which will protect you in case of theft or destruction of the car during the term of the contract.
The rate of leasing vehicles has grown steadily over the last couple of years. Approximately 30% of new cars are leased. This is due to lower costs at the pump, which decreases your cost to own, and affordable monthly lease payments, which allows you to get more for your money.
Whether you opt for a larger car or a car with premium features, you are among those buyers who realize the benefits of leasing in today’s market. Be assured that leasing a vehicle almost guarantees you a lower monthly payment. Explore your options to make the best decision for you, your finances, and your car. Contact DLC Estate Mortgages INC today! With more than ten years of experience in mortgage services, they will guide you through the car-buying adventure and help you determine if now is the right time for you to refinance!