Like millions of drivers in search of their dream vehicle, you may be asking the question “When is it best to lease a car?”
Instead of asking you to crunch the numbers yourself, we went ahead and found the answer for you.
For many good reasons (and not just the math), more and more drivers are choosing leasing instead of buying. Lease volume has doubled in the last five years; about a third of all new car and truck transactions are now leases. For many it makes good sense, especially for millennials who are driving the charge in leased vehicle volume, but also for seniors. In fact, some of the stronger growth in leasing comes from drivers over the age of 75.
Leasing is Easier than Ever!
One of the largest draws: Imagine never having to set foot in another dealership. Because, if by chance you were to find yourself in a showroom throwing your hands up sky high at shell-games and bait-and-switch tactics, or surrendering to burgeoning bottom lines and hidden costs that come with buying a car from a dealership – you can bet that you’ll be seeing more add-ons for the financing of that car.
The point is to walk straight through the double-doors and get away fast. Try looking online instead – at the wide availability, personalized options, fixed monthly payments, and tax benefits of a leased new vehicle. Lease pricing can be hassle-free and negotiated online with a virtually unlimited selection of makes and models and several available payment plans. Almost like having a two- or three-year-test-drive, your leased car also comes with an option to buy in the glove compartment. Better still, you’ll know both the exact sales price and the condition of the car if you choose to buy it.
Because the monthly payment of a leased vehicle covers the taxes and depreciation only for the duration of the lease, and not the lifetime of the vehicle, taxes paid will be lower while depreciation that can be written off will be higher. Even though the lease payment period may be the same as a purchase payment period, lease payments will be less.
The Future of Resale isn’t Clear
It’s always easier to buy than to sell, and things change. What the resale market will be like when you go to sell several years from now is always an unknown. The resale value of your vehicle will depend on many factors beyond your control. The national economy, local oversupply of used cars, bad press about your particular model, and big-ticket repair costs of engines and transmissions are just a few that can suddenly appear. In addition, your own marketing skills will all affect the resale price. You might ask yourself, “Is selling used cars my strong suit?”
- A new car every few years reduces the chances of breakdowns and cuts your maintenance cost to zero – while it looks good, smells good, feels good, and impresses the neighbors all at the same time.
- The Low-or-No down payment of a leased car will leave you with more cash to leverage in other investments, and less equity tied to your vehicle.
- Because of group rates leased cars come with lower insurance premiums.
- New vehicles come with new technologies that have changed fast. A few items to look and ask for:
- Forward-collision warning, automatic emergency braking, a backup camera, rear cross-traffic alert, blind-spot monitoring
- Apple CarPlay and Android Auto, Bluetooth connectivity, 360-degree surround-view camera systems, head-up displays, USB port, voice controls, keyless entry
- Heated seats and steering wheel, dual-zone automatic climate control, automatic high beams, an added Spare tire
For some, buying a new or used vehicle may be the better choice. But increasing numbers of drivers are choosing to lease instead. Weigh all the options of leasing against the particulars of your personal life and financial situation. Then take some time to visit a dealership and compare. If you get home debt free go online to shop the wide variety of possibilities for leasing instead of buying.