When you need a new vehicle, you typically have two choices: you can buy a new vehicle, or you can lease one. When it comes to car leases, many people can be confused on what exactly the benefits are to leasing a car instead of buying one. Leasing a car is similar to renting a home versus buying one. There are going to be pros and cons to both renting as well as buying. Some say that owning is always better because they like the idea of their monthly payments going towards the equity of their house, while some prefer renting because there is less responsibility, no property taxes, and they are not responsible if a big ticket appliance breaks, such as the furnace of the water heater.
Leasing a car is going to have its own set of pros and cons, and they can not be directly correlated to renting a home, primarily because automobiles do not appreciate over time the way that property does. Let’s take a closer look at the befits of leasing a car instead of buying one. When you lease a car, it is kind of like a long term loan. You typically sign a 12 month or 24 month lease, and the car is essentially yours for that period of time. You make monthly payments on it the same way that you would if you purchased it and had a car loan. Only, with a lease, there is no need to take out a loan. The monthly payments go towards the cost of the car, but you have not put yourself in debt in order to drive it. No car loan also means that you do not have any interest racking up on a loan that you will ultimately have to pay back.
Another benefit of leasing a car is the flexibility. You can lease an almost new car for a year or two, and then when your lease is up, you can trade in that car for a newer one and drive that one for another two years, and so on. Everyone loves that new car smell and the enjoyment of driving a brand new vehicle that has all of the latest technology in it. When you lease a car, you get to experience that again and again. Car leasing is great for people that enjoy the latest technology and being able to drive around the latest models.
Since a car lease typically lasts only for a year or two, you also get to give the car back before it starts having issues that need repair. The two year mark is right when cars start to need some big repairs completed, so you get to skip all of that hassle and move on to the next vehicle. If you find yourself at the end of your lease and you just can’t bear to give the car back to the dealership, then you can utilize their car buying services in order to purchase your vehicle. Think of it like a two year test drive.