When it comes to getting a car, you have the option to purchase or lease one. You can buy a new or second-hand vehicle depending on your budget and preferences. Leasing is the other choice, but it’s not for everyone. How will you know if car leasing is the best option for you? If your answer to all the questions below is yes, then leasing fits your needs.
Do you need to use the vehicle for a few years only?
When you purchase a vehicle, it will be yours for life or until you decide to sell or dispose of it. If you see yourself using one car for the years to come, buying is ideal for you. However, if you will only be using it for a few years, leasing is a better choice. Leasing terms vary from one provider to another, although most of them have three-year contracts or more. Make sure that you can commit to the term as early termination may result in a hefty fine.
Do you prefer a lower down payment?
One of the things that make leasing popular for clients is its lower down payment. If you want a cheaper upfront fee, car leasing will give you that. A financed vehicle may be yours to own, but the down payment is significantly higher. If you need to use the car immediately, but you can’t afford the down payment of buying one, consider leasing. There are cheap car lease deals out there that will meet your budget.
Do you like lower monthly payments?
The monthly payment for the lease is lower compared to purchasing a vehicle. You will only be paying for the depreciation value. If you buy a car, you will pay for the remaining balance of its total amount. For instance, if you have a lease term of three years and the depreciation value of the vehicle within that period is 50%, then that is the amount that you will pay. The down payment will be deducted, and the remaining balance, plus the other charges will be added then divided by the number of months that you will be paying the lease.
Will you be driving just around the neighbourhood?
If you are mostly driving just around the area and you don’t drive that far often, leasing is beneficial. You don’t want to spend a lot of money purchasing a vehicle that you will not frequently use. Leased vehicles have a mileage limit. It’s typically around 15,000 miles per year. If you think that you will not go over that, then good for you; otherwise, it means an additional payment. Negotiate with your provider about the excess mileage rate, to get it lower.
Do you want to drive newer model cars?
Buying a new car model every few years will cost a lot of money. If you love driving new car models, leasing will work for you. At the end of the lease contract, you can renew your lease and opt for a newer model.
Be sure to understand everything written in the contract before you sign the lease to ensure that you are making an informed decision.