Choosing to either buy or lease a car comes down to priorities and the amount of money you want to save. For some, it's about the savings. For others, it's about owning the car 100% and their connection to the car. You may prefer to own a car so that you can have it all for yourself. But, you may put saving cash in the short-term first and foremost.
If you want to save money while being able to change cars every three years while only paying a fixed amount of money every month, a car leasing contract is perfect for you.
Benefits Of Leasing A Car
Leasing is the long time renting of a vehicle for an extended period (years) instead of days or weeks. It can also be seen as using a car for a fixed period at an agreed amount of money. When leasing a car, you pay an initial deposit followed by subsequent amounts of money being paid monthly throughout your leasing contract.
A leasing contract usually lasts for between two to four years. Dealers often offer leasing as an alternative to buying the car. Although buying a car is good, leasing the car saves you money.
- Leasing is only available on brand new cars: You can buy any type of car you want, either used or new; that is not the case with leasing a car; cars that are leased are always new straight from the manufacturer to you giving you the first taste of the car while enjoying its new technology and features.
- Car warranty: Most brand new cars come in a three-year warranty, so the same three-year warranty that applies to a new car that is being bought applies to you too when you are leasing a car, so sometimes you are covered in warranty for the duration of their contract.
- The manufacturer solves major car issues: When driving a leased car, the only thing you have to worry about are little things: changing faulty tires, fuel, changing of the oil, and the car service; the leasing company always deals with every other major car issue.
- You might be offered a new car at the end of your lease contract: If you want to keep a clean look, drive the latest cars every three years then lease another car; you get to keep a professional look, enjoy the luxury If driving the latest cars while saving a good amount of money.
- Tax: Unlike buying a car, you won't be paying the sales tax on the entire purchase of the car that would cost you a lot of money. You would only be paying the sales tax of your monthly payment; it is cheaper to lease a car than buy one.
The Things You Should Know Before Leasing A Car
You don't legally own the car: when you buy the car, you legally own the vehicle, you have every single thing to be paid for and now can use the car as much as you want; you can sell it or do whatever you want with the car (well within the law!)
Unlike leasing, you have to be careful with the car as you don't completely own it. You still pay monthly and damage done to the car due to recklessness will incur a fee but not owning the car legally can also mean you don't have to worry about the future of the car or how much you might lose when you decide to sell it.
- Additional fees: At the end of a leasing contract, you could be charged with an additional fee incurred by the vehicle's wear and tear. You can also decide to buy the car or start another leasing contract with another brand new car which also will come with charges, but all of this cost will be covered in your monthly payment.
- You are paying for the car's depreciation: For Example, if a car is worth $30,000, the estimated calculation for what it would be worth in the next 3 or 4 years is $20,000; it is the difference of $10,000 that you would be paying when you lease the car monthly coupled with additional small charges just to make sure the dealer at least makes some money.
- Allocated miles per year: With a leased car, there is a limit to the miles you drive yearly; they are usually between 10,000 and 20,000 miles per year. Going beyond these stipulated miles will also incur additional charges because driving the car more than the allocated miles can speed up the car's depreciation value faster.
- Insurance: When leasing a car, you have to have car insurance that would cover the car in case of a severe accident that would not be covered by the manufacturing company or the leasing company.
- Vehicle Cost: Before going into a leasing contract, know the total amount of what the monthly payment will cost you. If you can keep it up for a long time because a leasing contract cannot be terminated prematurely, know the car's depreciation value after the contract has ended to be able to plan your savings and finance accordingly.
Summing-up
Buying a car can add to your worth or save you from not doing what you want with your vehicle; everyone wants something to call theirs. However, if you want to save more money and drive the latest car without worrying too much about the future of the car, then go for a newer one after a few years; leasing a car is a great option; it is straightforward and convenient.