As a consumer, you typically hear all the negatives on vehicle leasing. I, as a personal finance blogger, am here to tell you that leasing a car isn’t necessarily the worst financial decision you could make. Let’s first consider the different aspects of car leasing, and then you can make an informed decision on your own.
First, does buying a car make your sense for you? Only you have the ability to answer this question. If you plan on buying a used car, 3+ years old, and then driving it into the ground then perhaps you should stick with buying. However, if you plan on buying a new vehicle, financing a loan, and getting rid of it after a few years then you need to seriously consider the benefits of leasing a vehicle.
Are you knowledgeable when it comes to automotive repair? Personally I couldn’t change the oil in my car if my life depended on it. If my radiator starts leaking, or my brakes go out, then I am stuck with going to the local automotive repair shop. I don’t know about you but I don’t usually trust these guys to fix my car, nor do I want to deal with the hassle and cost of it all. Typically when you lease all major repairs are covered by the dealership.
Monthly payments tend to be cheaper for a variety of reasons! First, dealerships are inclined to provide good deals and incentives on car leasing simply because it is a proven fact that people who lease cars are over three times more loyal to that brand and dealer than those that purchase cars. Also, financing a car comes with interest charges, whereas a monthly lease payment is more akin to renting the car. Lastly, consider that when you purchase a car you are taking the full sticker price of the vehicle and essentially dividing it over the number of months you are financing. The lease calculations are a bit more complicated, but they have a lot more to do with the difference between the value of the car now and when you turn it back in.
Quite honestly, both buying and leasing have their own merits. The question that truly needs to be answered is “which is the better option for you?” If you’ve decided that leasing is the way to go then check out a reputable company like Leasing4Business for some options that may be available to you.