Advantages and Disadvantages of Car Leasing

The Advantages of Car Leasing No doubt about it, your car is essential to your life! It also represents one of the most expensive bills you have to pay every month. Perhaps the best answer is car leasing. By leasing your car, you can drive a newer vehicle for less money. Here are some of…

The Advantages of Car Leasing

No doubt about it, your car is essential to your life! It also represents one of the most expensive bills you have to pay every month. Perhaps the best answer is car leasing. By leasing your car, you can drive a newer vehicle for less money. Here are some of the major advantages of leasing your car.

Lower Upfront Costs

Getting into a new car usually requires that you have quite a bit of money to sink into the automobile right from the start. You need a down payment as well as money for tax and license. All of these expenses are significantly lower when you choose leasing over buying. Some leases require a small down payment, but they rarely require as much up front as is needed when you purchase your car. In addition, you can probably lease a more luxurious car than you could otherwise afford.

Lower Monthly Bills

Probably the most alluring aspect of leasing a car is the lower monthly expense. The monthly lease payment can be about half of what you've got to pay to be buying the car outright. Along with smaller payments is the advantage that you will never be in a position that many car buyers are in, in which the vehicle itself is not worth as much as the buyer owes on it. Cars and trucks depreciate quickly. The equity you are paying for when you buy the vehicle, however, accrues slowly. This is because the first payments you make tend to be mostly interest with less applied to the principal.

Lower Maintenance Costs

When you lease your car, you can afford to drive a new car that is still under the manufacturer's warranty. Many drivers can not afford to buy a newer car, and are saddled with more repair bills. By getting a lease that corresponds to the warranty, you can skip a lot of the maintenance expense. If you are trying to avoid maintenance headaches, leaving can be the way to go.

Tax Advantages

Because you do not own the car, you probably will not have to pay property tax on it. This varies from state to state, however, so check your own state laws to be sure. Leasing also brings a tax break if you happen to use your car in the operation of your own business. Business owners can deduct the expense of a leased vehicle.

Less Overall Hassle

Getting into a lease agreement can be more complicated at first than entering a loan agreement, but once it is arranged, you do not have to worry about used car hassles. In other words, you will not have to try to get the best deal from a used car dealer or find a buyer when you decide it's time to upgrade to a new vehicle. You can simply lease another new car when the terms of your current lease are over.

Leasing is Not For Everyone

There are people for what leasing is not the best option. The main disadvantage to leasing is that you never own the car. When you buy the car, you have the hope of someday being free of monthly payments. Remember, though, that by the time the car is paid for, it is likely to be a bit worn out and you'll probably be wanting a new car anyway. People who prefer ownership and do not mind driving an older vehicle for many years will probably not be good lease candidates. Also, if you put many miles on your vehicles, you may be liable for extra fees on your lease. A lease is best for those who have predictable lives requiring moderate car use, and who desire to minimize the hassles of buying a car.