Many people these days rely on cars as an integral part of their daily lives. If you work close to your workplace, you are probably dependent on your car for job searches, meetings, and running errands.
If you want to explore other areas in life, then you need the freedom that comes with owning a vehicle.
But before deciding whether or not to purchase a new car, there is one factor to consider – lease!
A lot of individuals make the mistake when they first start looking at vehicles by thinking only about buying. They forget that spending several thousand dollars can’t always be done easily without first considering leasing. This article will go over some of the benefits of leasing a car, as well as some drawbacks.
We will also look at how much money you will save if you choose to lease instead of buy.
- 1 Cons of leasing a car
- 2 Leasing can be flexible
- 3 You can try different models before making a decision
- 4 You can choose your own colors and accessories
- 5 You can upgrade your car when you’re ready
- 6 You can keep your car for a long time
- 7 You need to pay a deposit
- 8 You may not be able to test-drive the car
Cons of leasing a car
There are some important things to know about owning your vehicle costs, including lease payments. While it may seem like a good deal at first, you will also have to consider what fees exist for using your vehicle as well as how much money you will spend in interest!
Consistently high monthly payments can be frustrating because you want to own your vehicle soon. It is very difficult to do this when you are paying more each month than it would cost to buy the car! This way of buying a car is still an excellent option if you must have expensive cars or people go along with you spending money then they enjoy being part of the payment team just as much as you do!
Another drawback of purchasing a new car is that most dealerships require you to make an offer on the car before taking you into their dealership. This is so they can get you under the price cap which is why there are sometimes many different offers for one car.
Lease contracts usually come with large amounts of money needed for upfront fees such as licensing, documentation, taxes, etc. These are add-on fees that run around $1,000-$2,500 per individual. If you need to invest in additional equipment such as safety systems or performance parts, these too are extra fees that are not included in the purchase price of the car.
Leasing can be flexible
A lot of people these days feel that buying a car is no longer a option because you cannot finance it with a low monthly payment. This is not the case however!
Leasing allows you to have access to the vehicle for a set period of time, typically around three months to a year. You will then return it and receive your next model back in exchange!
This way, you do not need to worry about paying high monthly payments as well as having enough money left over to enjoy your daily life. Also, leasing sometimes offers better discounts than buying due to the fact that they include all fees associated with owning a car, such as insurance, taxes, etc.
Considering the costs of investing also, there are many ways to manage your spending by renting rather than buying. For example, rental cars tend to have much lower overhead (costs) like fuel which help reduce the overall cost of owning a vehicle.
You can try different models before making a decision
It is important to do your research before deciding whether or not to lease a car. There are many factors that determine which option is best for you, so it makes sense to look into them before buying anything!
Leasing allows you to test out a vehicle before investing in it. This way, you will know if this model works for you or not before purchasing one already installed with miles on it.
It is also important to compare like cars within its category to see what features are worth having and what are not. Some vehicles offer more comfortable seats than others, for example.
As mentioned earlier, leasing allows you to return the vehicle at any time. This gives you flexibility in how to spend money since you do not have an obligation to keep the car longer than needed.
There are some drawbacks to consider when choosing between monthly leases and purchases. Namely, cost-per-mile fees and depreciation.
Cost per mile refers to the fee that most major automakers impose on their customers for every 1,000 miles that they own the car. For example, say you put 5,000 miles on your car each month. Then, the company may charge $50 for every 1,000 miles beyond 5,000. This adds up quickly!
Depreciation is the reduced value of a used vehicle due to physical damage or lack of use. Since leasing means using the car every day, it reduces the value of the vehicle.
You can choose your own colors and accessories
One advantage that lease cars have over buying is you do not need to worry about financing! This removes one major barrier to car ownership, which is being able to afford the payment.
Most leases require you to make monthly payments for at least an agreed upon amount of time (often around three months), after which you are given back the vehicle. At this point you can either keep the vehicle or return it, with no obligation to buy it.
This also gives you more time to find a good deal on the car you want before signing on the dotted line. A lot of people begin looking for their dream car soon after purchasing so having extra time can save you from getting a poor quality vehicle.
Another benefit of leasing is the ease of switching vehicles. If you found out two weeks ago that you now have five things to do every day, you could easily put up a fence in front of the house and say “Nope, I’m staying in here!” And then you would be leaving yourself stranded wherever your current job took you.
By leasing, you get to pick out what car is next in line. This way if someone else’s model inspired you, you can take the test drive without paying for a new car.
On the other hand, there is no warranty or security blanket when you lease a car. If the manufacturer does not stand behind its products, you are lost.
You can upgrade your car when you’re ready
One major benefit to leasing is that it gives you access to all the cars in the dealership’s inventory, which could include new vehicles or upgrades.
You get all the information about an automobile before you buy it, so you know what features are important to you and if they’re overpriced.
By buying a vehicle directly from the seller, you lose this opportunity. In fact, there’s a reason why some dealerships don’t allow you to test-drive cars!
Leasing also allows you to stay within budget, as it works with monthly payments instead of one large purchase.
You can keep your car for a long time
With leasing, you are not buying the vehicle. You are just paying to use it for a set amount of time! This way, you do not have to worry about financing or maintenance costs as much. Since the dealership is also taking care of that for you, they want to make sure you are happy with the vehicle so they will go above and beyond to ensure this.
Furthermore, most lease contracts these days include some kind of warranty coverage. Some cover the power train (engine and transmission) while others only cover the body work and mechanical components. These warranties usually range from one to three years depending on what package you choose. After the contract expires, you can either return the vehicle and get your money back or keep it and look for another new model year vehicle.
Another perk of leasing is that many companies offer frequent buyer programs. This allows you to re-lease the car every few months or even monthly if needed. Many times, people in busy careers need a second car to run errands around their jobs, so this option makes sense for them.
You need to pay a deposit
A lot of people believe that buying a car is better than leasing one, but you will notice that this perception is not shared by most dealerships. Why? Because they make more money when you lease!
The cost of purchasing a vehicle includes a down payment, an acquisition fee, documentation fees, tax preparation, and finance charges in addition to the price of the vehicle itself. This is why it’s easier and usually less expensive to buy a vehicle than to lease one–it doesn’t make much sense for them to invest in equipment in case you don’t!
However, there are some additional costs associated with buying a car that many individuals may not know about. One of these is the warranty. Most warranties cover repairs for either the engine or body of the vehicle, and both can be very expensive unless you have adequate coverage. Some purchases come with extended warranties which reduce the initial purchase price of the vehicle.
A second reason to consider buying instead of leasing is personalization. While it may sound silly, having control over what colors and features your car has means looking into and investing in things like performance packages and livery. It also helps promote customer loyalty since they picked the color themselves.
There is no denying that each method has its advantages and disadvantages, so depending on your situation and how much money you want to spend, going with one option or another makes sense.
You may not be able to test-drive the car
One disadvantage of leasing is that you cannot typically test drive the vehicle. This can be frustrating if you want to make sure this car fits into your life before you sign up for it! Luckily, most companies will allow you to take the vehicle home for the day which helps mitigate this drawback slightly.
If you are looking to save some money then this could be your best option. While it does have its disadvantages, I would still recommend it if you do your research and find the right company. It is important to look at both benefits and costs so that you don’t feel like you are being taken advantage of.
Car leases can sometimes seem expensive due to all of the fees and taxes involved.