Car ownership is often considered the American dream and holy grail of independence. However, this overlooks the obvious advantages of leasing a car, which gives you all the benefits of ownership without locking you into a long-term commitment. And that’s just the beginning of the benefits of leasing a car versus buying one. Leasing 101 facts lay out very clearly why leasing is sometimes a better option than buying.
First things first, when you finance a car up front, you’re financing the ENTIRE price of the vehicle. And that can run into tens of thousands of dollars. Since you’re financing the entire vehicle and will one day own it, you’re going to pay a monthly payment based on the entire price of that car. With leasing, you are only financing for the amount of time that you’re going to be driving the car, usually 3 years or less. Because of this, monthly payments are lower on a leased car than one purchased brand new. Auto lease specials often encourage people to give leasing a try and they fall in love with leasing.
Secondly, you’ve got a lot of flexibility when you lease. If you love to drive new cars all the time but can’t afford to buy one outright, you can still get the car of your dreams by leasing. You’ll be able to drive a much better quality vehicle than you might have been able to afford brand new. There are occasions when leasing is better than buying and somewhere buying will be better than leasing, and it often comes down to what you can afford. Don’t settle for buying a new car you don’t like when you could lease one that you are really in love with from the moment you drive it.
Other than quality of the car you’ll be driving and the lower monthly payments, there is also an advantage on taxes if you’re a business. If you lease cars, you’re going to get tax breaks because they’re going to be a business expense and there are other tax advantages as well. This is why so many businesses opt to lease their fleet rather than buy a fleet, a decision that can greatly increase the monthly payments your business has to make to function.
Other than not ever owning the car outright, you save a lot of time and money in the short run with leasing. Because you can’t re-sell the car, you won’t be able to profit off of it at the end of your time, and for this reason some people do choose to buy instead. That doesn’t mean that you can’t also save money in the long run too, especially if you’re able to get a special on a lease or if you’re a business that stands to gain from tax advantages. Leasing is a terrific option for the majority of people who can’t afford to buy a car that they truly love. Instead of settling, try leasing for a while instead. Terms can be extremely short.