What Are the Benefits of Leasing a Car?
Leasing a new car has several distinct advantages over buying a new vehicle. We’ll look at several of them in depth.
Lower Monthly Payments
Because you are paying for the depreciation that occurs during the term of your lease, monthly payments are almost always lower with a lease than they are when you are buying a car. While it’s never a good idea to base your decision on monthly lease payments alone, finding a payment that fits into your monthly budget is important.
By leasing, you may be able to get a nicer car or afford a few extra options for the same monthly payments as you would have if you were buying.
In order to get the latest safety and connectivity tech, you really need to have the newest car you can find. The latest models are loaded with advanced safety features and advanced driver assistance technology, such as automatic emergency braking, adaptive cruise control, lane keep assist, and semi-autonomous driving systems. Advanced connectivity features, such as 4G LTE data connections and support for Android Auto and Apple CarPlay are now common even in lower-priced vehicles.
Depending on the vehicle you lease, you can find a model with better fuel economy than similar models from just a few years ago.
Unless you are putting a lot of miles on your new ride, it will be covered by the manufacturer’s warranty for the entire time that you’re driving it, since the term of most leases is just a few years. You don’t have to worry about the cost of expensive repairs, as your dealership’s service department should take care of any problems that occur.
Ease of Trade-In
When your lease is up, you can simply drive the car to the dealership and walk away after paying any final fees, along with any charges for excess mileage or excess wear. Of course, many leasing customers won’t actually walk away – they’ll drive off with a newly leased car. With leasing, you don’t have to worry about the hassle of selling or trading in your old car, or haggling over its trade-in value.
Depending on where you live, leasing a car can save you a tremendous amount of money in sales tax. In some jurisdictions, you only have to pay tax on the amount you put down and on your monthly payments. In other areas, you have to pay sales tax on the entire value of the car, which makes leasing a less attractive proposition. When you buy a car, you’re generally liable for sales tax on the whole purchase price, less the value of your trade-in in most states.
You’ll want to check with a tax professional who understands your particular circumstances and the specific tax laws of your location.
Smaller Down Payment
When you lease, you’ll often have a smaller down payment than if you buy. In fact, some leases require nothing due at signing. Many experts advise that you negotiate the lowest amount due at signing as you possibly can. If you pay a huge amount up front and wreck the car on the way home from the dealership, all of your down payment money is gone. Make a small down payment, and you’ll have less exposure to losing that money.