Leasing is a great way to mitigate the cost of a full purchase. If you consider it the same as paying rent it starts to make a whole lot of sense why so many people choose to do it.
Whilst there are some upfront fees that need to be paid it’s in no way comparable to fronting the full cost of the car. The only cost is monthly installments of the lease and that can be a whole lot more attractive if you are on a budget.
It’s vital that you stick to the terms and conditions laid out in the lease agreement as there are some legal and financial repercussions of not paying so make sure that you have the funds available on time each month.
Below we look at the several benefits that make leasing cars attractive.
Low monthly payments
Monthly repayments are fairly low and when comparing them to financing a car through a car loan, there is no question that using a leasing company is cheaper.
The main reason it’s cheaper is due to a finance company helping you to pay the full amount of the car whereas a car lease company calculates lower monthly payments for use of the car.
Lease payments are lower as you only pay enough to cover the depreciation of the car, in addition, to the rental as well as taxes in place of the full value of the car.
With lower payments comes a whole host of savings which is a great benefit. Have a look at some of the great options available from a place such as leaseloco.com.
Less cash is required to get the vehicle
A brilliant benefit of leasing is the low up-front cost. When you finance a car you can expect to pay around 20% of the value of the vehicle in order to obtain it.
What you will need to pay is generally the first monthly instalment, tax, registration and title. All totalled, it’s far less than the cost you would pay for financing.
There might be an acquisition fee involved however this is still going to cost less money than the cash cost of finance.
Lower cost for repairs
The lease period is generally quite short which means that the repair costs will be covered by the manufacturer or the company that leases the vehicle.
This is a great cash saver as repairing a car can often be costly. In addition, services are generally paid for making maintenance costs the responsibility of the company leasing the vehicle.
Be sure to check your lease contract for particulars regarding repairs and maintenance to avoid any unforeseen vehicle charges.
No reselling concerns
At the end of the lease, you simply return the car and acquire a new one.
If you don’t own the car there is no need to sell it. Another reason that makes leasing a hassle-free experience.
The only thing that you might be liable for are charges for excess mileage, wear and tear, and any outstanding amounts that are due.
Get a new car every few years
A lease period can vary but they are usually in the range of 24 to 48 months.
A fantastic benefit is being able to exchange the old car for a new one with all of the latest bells and whistles without having to fork out lots of cash for a new car.
More cars to choose from
We all like the idea of buying a new car but that usually comes with a hefty price tag. Many people might have issues with qualifying for a car loan to purchase a new vehicle.
This is where leasing a car makes all the difference. You now have many options at your disposal and can choose a car that might have been out of your price range before.
Option to buy the car at the end of the lease
Car leases can come with some additional benefits such as being eligible to purchase the vehicle at the end of the lease term.
If you truly enjoyed the car you can choose to purchase it for less than the value of the car. There is no need to purchase it if you do not want to so this is something to consider.
You could consider the lease as an extended test drive before purchase.
In conclusion, should you lease a car?
There is no clear cut answer but there are a few things to consider.
If you do not have the finances to purchase a vehicle and need one then leasing is a great option.
Consider if you would like to change cars regularly or if you want to own one car for an extended period of time.
Leasing is a great way to have the benefits of a car without a lot of the excess charges for repairing and maintenance but be sure to double-check anything before signing and agreeing.