When it comes to getting a new car, the price tag seems to be always the crucial factor for everyone.
You simply don’t want to buy a car you cannot afford, nor sign a deal that will impact your budget in a disastrous way.
This is the reason why many people switch to leasing, which is very popular today.
Other factors such as time and user experience also influence people on their final decision: to buy or to lease?
In principle, vehicle leasing refers to the use of a motor vehicle for a determined period of time at an agreed price for the lease.
How frequently would you be driving your new vehicle over the long term? Do you want to stick to a single car for more than two, five or even ten years?
How much do you know about car leasing compared to the traditional form of ownership?
As facts always matter, let’s explore the pros and cons of leasing a car today.
The pros of leasing a car
Leasing a car comes with benefits which in many cases has more to do with your budget above anything else.
It’s really not expensive
By contrast, vehicle leasing typically comes with a lower down payment and monthly payments compared to the traditional vehicle ownership.
The lessee signs a deal in which they accept to pay for the vehicle’s depreciation and not the entire cost of the vehicle.
You can pick from several types of vehicles
As you will be getting more value for your money, including more budget room for additional expenses if required, you will be able to afford an upgrade.
That applies to new cars, trucks, and SUVs that you wish to lease.
Forget about trade-in nuisances
This is probably an advantage that has gained more traction over time, mostly for Millennials, who would rather lease a car because of its convenient simplicity.
Once the vehicle lease is over, all you need to do is drop it off at the dealership along with the keys. You are free from trade-in hassles.
Your vehicle comes with up-to-date features
You won’t need to be worried about getting bored with your current vehicle lease, as you will be able to switch to a new car every two or three years.
Either you go for a new car, truck, or SUV, getting a new vehicle with the latest features is simply awesome.
Yet you won’t be able to enjoy this choice had you own a vehicle for 10 years or so.
Get tax breaks for your vehicle lease
Banking on the state where you reside, business owners seeking for vehicle leasing opportunities may be eligible for tax cuts on the lease.
You could always refer to your trusted tax accountant to help you obtain the most tax savings in a vehicle lease deal.
The cons of leasing a car
Leasing a vehicle comes with a set of drawbacks that are worth examining prior to making any final decision.
When leasing a car, you would be getting a mileage limit up to approx. 15,000 miles per year.
Provided that you have a two-year lease and your odometer records display 32,000 miles when you return the vehicle, you may be subject to penalties with the dealership as specified on the agreement.
You are advised to discuss with your dealer about any penalty charges for exceeding your mileage limits.
Additional wear and tear costs
At the end of the lease, auto dealers meticulously inspect the vehicle to ensure the vehicle looks just like its original condition.
You may find this requirement almost impossible to fulfill, especially if you have kids or pets.
Expect wear and tear costs if you fail to keep the vehicle in accepted conditions.
Proving regular maintenance reports
The lease contract commonly requires lessees to demonstrate periodic check-ups and maintenance reports to ensure the vehicle was kept in optimal condition.
For that reason, you are strongly advised to keep the receipts on file and obtain a gap insurance so as to protect yourself from having your car getting damaged or totaled in an accident.
Returning the vehicle means the game is over
Every dollar you put into a vehicle which includes the down payment, the monthly payments extra fees, and penalties goes directly to the dealer, leaving you without car and money.
There’s no way you could recoup those payments as that’s the rule once the lease is over.
Your credit rating influences your eligibility
Dealers want to stay protected by all means. Don’t be surprised if they start demanding an acceptable credit score based on their eligibility requirements.
You will have more chances to be approved for an auto purchase than getting an approval for a vehicle lease.