5 Reasons Drivers Choose to Lease Their Cars
When the time comes to get a new car, deciding whether to buy or lease it is a tough decision. There are benefits and drawbacks to both options, and trying to determine which route is best for you can be both challenging and confusing. The number of drivers who choose to lease rather than buy their new cars is increasing, and those who lease instead of buy don’t make their decision based on nothing. There are several reasons why many drivers decide that leasing their car is the better, most cost-effective option for them.
Lower Monthly Payments
The average monthly payment for a driver who is leasing a car is approximately $100 less than the monthly payment for someone who is paying off a car loan. That average $100 monthly difference adds up to a savings of about $1200 per year— or more. If your lease is three years long, you can expect to save close to $4000 on monthly car payments
Fewer Maintenance Costs
When you own a car, maintenance costs add up over time. When added on to monthly car loan payments and exorbitant gas prices, regular maintenance costs can be a major burden on the average car owner’s finances. If you have a lower budget and choose to purchase an older used car to save money, you’ll probably have to spend money on repairs even more frequently.
Leasing a car helps you avoid maintenance costs for multiple reasons. First off, leasing a car allows you to choose a new car model with parts that are up-to-date and in perfect condition. It’s unlikely that the brand new car you lease will break down enough to require major repairs within the span of a two to four year lease. When you lease a car, you might not even have to pay for unavoidable regular tune-ups. Most of these minor services—like oil changes and tire rotations—should be covered under the factory warranty of your new car for most or all of your leasing period.
Lower Monthly Payments
The average monthly payment for a driver who is leasing a car is approximately $100 less than the monthly payment for someone who is paying off a car loan. That average $100 monthly difference adds up to a savings of about $1200 per year— or more. If your lease is three years long, you can expect to save close to $4000 on monthly car payments
More Flexibility
Car enthusiasts who get excited about the prospect of driving the newest model on the market love the freedom and flexibility leasing cars affords them. Many drivers on a budget are unable to afford the full cost of a new car. That leaves them with the option of agreeing to a long loan and high monthly payments or settling for a less exciting, less attractive used car model.
Leasing a new car allows drivers on a budget to enjoy the excitement of picking out a new car based more on how much they like it than on how much it costs. It opens up the option of driving more expensive, attractive car models to drivers with a budget that can’t accommodate the cost of buying a new car themselves.
Plus, leasing a car requires much less commitment than buying one. When you buy a new car, you’ll probably drive it for at least six years to get your money’s worth before trading it in for a new model. The average car lease length, on the other hand, is only about three years. If you’re someone who gets antsy quickly and likes to buy a new car frequently, leasing a car gives you the opportunity to try out a new model every couple of years without wasting your money.
No Depreciation Worries
One of the most frustrating realities of buying a brand new car is its rapidly depreciating value. The value of a new car begins to depreciate immediately—in fact, it is estimated that a new car’s value depreciates by 50% as soon as you drive it off the car dealership lot. The rapid, significant depreciation of a new car’s value can pose a serious problem for new car owners and cause them to lose money when they eventually want to sell their car.
When you lease a car, you don’t have to worry about its depreciating value. The value of a new car depreciates the same way whether you buy it or lease it, but drivers who lease their cars don’t lose money because of that depreciation. The only payments you have to think about when you lease a car are your agreed upon monthly leasing payments, which means you don’t have to worry about how much value your car loses over time.
Tax Benefits
A lesser-known advantage of leasing a car rather than buying it is the tax benefits you can get from leasing. Many drivers—especially those who are self-employed, commute long distances, or have to drive frequently for their job—choose to lease a car because their job allows them to write off their monthly lease payments as tax deductions.
Writing off your lease payments as tax deductions can significantly reduce your taxable income and lower the amount you have to pay in taxes each year. Not all drivers are eligible for these write offs, though. Make sure you confirm your eligibility before leasing if tax benefits are a deal breaker for you.
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