Lease Vs Loan: When Does Leasing a Car Make Sense?
Whether it’s your first or second car, there’s no doubt having a car at your disposal is not only exciting but also essential. A car means you don’t have to worry about commuting using public means. You can wake up at any time and head off to wherever your heart desires.
However, for most people owning a car isn’t cheap. It’s no wonder auto loan debt is at an all-time high.
There’s another option you might be considering: leasing. But when does leasing a car make sense?
Continue reading to find out:
How Does Leasing a Car Work?
Before we get into answering your question, “when does leasing make sense” it’s essential to describe how leasing works.
In simple terms, leasing is like renting a car for a specified period of time. You get the car, usually new, from a dealership and make monthly payments. On the expiry of the lease, you’ll return the car to the dealership.
You could decide to buy it, but generally, it makes no economic sense to buy a car after your lease expires.
Now that you know how leasing works, let’s focus on finding out when it’s better than buying a car outright or taking out a loan.
You Can’t Afford to Buy or Take Out a Loan
Buying a new car outright is out of reach for a vast majority of people in the U.S. Although auto loans are more affordable, it’s still possible that you’re unable to secure one, especially if you have bad credit.
Leasing is cheaper than getting an auto loan. With a car loan, you’ll eventually own the car, which means you will pay the car’s full cash price. This isn’t the case with leasing, which explains why it’s a bit cheaper.
Scour through nationwide car leasing sites and you’ll certainly get a good deal that suits your finances.
You Want a New Car
Buying a brand-new car comes with lots of advantages. You get the latest technology and, yes, bragging rights.
However, new cars cost a pretty penny. The average cost of a new car is about $36,000. Do you have this kind of money?
It’s the prohibitive cost of new cars that makes most people opt for used cars.
So, if you don’t want to buy a used car, you can get a new car by leasing. What’s more, when your lease expires in about three years’ time, you can get another lease for a newer car.
You Don’t Want to Worry About Maintenance
Owning a car comes with maintenance and repair costs. These can add to your expenses substantially.
With leasing, you don’t have to worry about maintenance and repairs. If the car needs routine maintenance or repairs, you’ll take it back to the dealership and it will fix the vehicle at no extra costs to you.
When Does Leasing a Car Make Sense? Now You Know
So, when does leasing a car make sense? We’re tempted to say all the time because leasing is a really good way to have a car at your disposal without worrying about the costs that come with ownership.
You probably need to lease your next car!
All the best and keep reading our blog for more tips.