The Truth About Leasing Cars
Everybody has opinions about everything these days. You've probably heard arguments both for and against leasing, but now you're researching for yourself. That's smart! Smart because you should always look for in-depth information and smart because we have the definitive answer to the question of whether leasing is a good idea or not.
And here it is...Leasing, is GOOD....IF you live your life a certain way and leasing is BAD if you don't live your life in a certain way. There's nothing that's inherently wrong with it. It's just not suitable for 100% of the population. That's the simplest way to put it. We'll explain it to you.
The Primary Considerations
There are a few requirements of car leasing that are not required of loan financing or cash payment deals. They aren't unfair or underhanded but they are disadvantageous.
1. Mileage Limits
The first requirement of leasing is mileage limits. You have to choose how many yearly miles to which your travel is limited. If you exceed those miles, you'll have to pay an extra fee per mile. It could be 10 or 20 cents, depending on your particular auto brand. Because of this, you'll need a fairly predictable lifestyle to make car leasing work. It might not be a good fit if you like to take long, spontaneous road trips.
2. Lease Term
Just as you'll have to choose your yearly mileage limits, you'll also have to choose the time period for which you'll take care of the car. You won't own it. Think of it as being the tenant of the car. You're just taking care of it and using it to travel. Therefore, you'll be charged if you dirty or damage the car too much. Ask your sales rep for details. The fees vary by dealer. You may choose to buy excess wear and tear insurance.
Unlike purchasing a car, leasing has an expiration date. When the lease is over, you have three options. You can purchase the vehicle at its remaining value, you can return it and walk away or you can return it and lease another vehicle. This isn't a limitation. The limitation is the requirement to pay your monthly rate until end-term. It may not be easy to escape the financial duties. You may be able to offer your car to another lessee for the rest of the lease period (using a website like swapalease.com, if you want). This is called a lease assumption. However, your dealer may not transfer responsibility completely. You may be liable if the person who assumes the lease can't pay. You should ask about this before you sign any agreements.
You might not want to lease a car if you're not confident about your finances. You can't just sell the car whenever you want and other options may not be complete "ways out."
The Advantages of Car Leasing
Just as there are relative disadvantages to leasing, it also has advantages that other options can't provide.
1. Lower Monthly Rate
Leasing is usually cheaper, in terms of monthly bills, than loan financing. We'll spare you the calculations that explain why. Just know that, in most cases, lessees pay a lot less each month. You'll have to get leasing and loan financing quotes to get an idea of exactly how much less YOU could pay, specifically. It depends on several variables.
2. New Car and Warranty
Lessees drive new cars that are still under warranty. They rarely have to pay for repairs and they get to smell that new car aroma for the same monthly cost as other drivers pay for older, less premium cars. Sometimes they love it so much they lease over and over again. It's an attractive proposition!
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