Shopping for a car can be pretty overwhelming, especially with the countless options available to choose from. You also have to make many difficult decisions, including whether to purchase a new or used car, the car insurance amount required, and the deals and financing options available. Another consideration is whether to buy or lease the vehicle, which largely depends on your financial situation, personal preferences, and lifestyle.
While buying a car allows you to own it, it’s not always the best option. Not only does it tie up a lot of ready cash in down payments, but it may also cost you more money in the long run. This makes car leasing a smarter option than buying. One of the best things about car leasing is that it gives you a chance to purchase the car at the end of lease period in a buyout.
Another great thing is that you can negotiate the buyout price and qualify for an auto loan even with bad credit. Along with giving you the option to own the car at the end of your lease term, here are some other great reasons why car leasing may be a better option than buying:
Lower down payment
One of the main benefits of car leasing over buying is the lower down payment. Buying a car requires you to pay a significant down payment upfront. Most down payments can be as much as 20% of the vehicle’s value. On the other hand, a car lease often doesn’t require putting any money down unless you have bad credit.
The only money you’re required to pay upfront when leasing a car is the first month’s payment, taxes, and some fees, which is usually much lower than the down payment for purchasing a car. This makes it easier to get into a car without taking out a loan or incurring hefty costs upfront.
Lower monthly payments
Another advantage of car leasing is that you make lower monthly payments than when purchasing a car outright. When financing a car purchase with an auto loan, you’re required to make monthly payments to pay off the loan plus the accrued interest over the life of the loan. With a car lease, however, your monthly payments are usually much lower than when financing for the same vehicle.
This is mainly because leasing a car allows you to pay only for the car’s depreciation during the lease period and some fees, taxes, and rent. Since you’ll not pay for the entire car purchase price, your monthly payments will be significantly lower. Thus, a car lease allows you to save chunks of money, which you can use to upgrade to a more desirable car model or purchase the car at the end of the lease term.
Minimal maintenance costs
Leasing a car means you‘re responsible for only basic maintenance issues like fluid checks and oil changes. You don’t have to worry about additional maintenance and repairs since the manufacturer’s warranty usually covers them. Some leasing companies even cover certain basic maintenance, such as tire rotation.
Additionally, if you lease a new car, you can go for years without experiencing any major issues with the car. That’s because things like brake pads, batteries, and tires, usually take years before needing to be replaced. When that time comes, you will likely have already returned the car to the leasing company. Be sure to inquire from the dealership about what maintenance deals and warranties are included in the lease.
No need to worry about depreciation
Unlike other investments, your car starts to depreciate from the moment you drive it off the lot. If you decide to buy a car, this can be problematic when you decide to sell it since you’ll end up losing money. However, when you lease a car, you don’t have to worry about depreciation since the leasing company usually bears this risk.
If you buy a car, selling it when it has already depreciated in value can be extremely difficult. If you decide to trade it in and put the money toward purchasing a new car, you may not get the best offer for your trade-in. That means you’ll need to borrow more money to close the deal. With a leased vehicle, you only return it to the leasing company after the lease period ends and do not have to worry about it again.
You could upgrade
Most car lease terms are typically about two to three years. That implies you’ll only drive that car make and model for the duration of the lease. However, most leasing companies nowadays offer you a chance to get a new vehicle with a new lease once the first contract runs out. That means you can trade in the car for something different after the lease ends. This allows you to get a car with more upgrades like touchscreen navigation, heated seats, and the latest safety features, which may not be available when buying a car.
This option can also be useful when you want to downsize your car and save money. It also allows you to drive a brand-new car with the latest features and cutting-edge technology for less money. This makes car leasing a suitable choice, especially if you get bored of driving the same car for too long or want to drive a different car after every few years.
While car leasing may not be the best option for everyone, it can be a smart choice for those who want flexibility with the vehicles they drive without the hefty cost of purchasing and maintaining brand-new ones. With reduced monthly payments, flexibility, lower upfront costs, and maintenance warranty, car leasing offers you a more affordable option to get a car than buying a new one.
If you want to lease a car, ensure that you compare quotes from multiple dealerships, the miles included with the lease contract, and the terms and conditions of the lease. Most importantly, consider your lifestyle when deciding whether car leasing is the best option for you.