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What are the benefits of leasing?
Home » Automobiles » Should I Buy or Lease a Car » What are the benefits of leasing?Automobile leasing can be a very attractive alternative to buying for some people, although it definitely is not for everyone. You must decide about the importance and relative priority of these benefits to you.
The advantages to leasing a vehicle are:
• Lower Monthly Payments - Because you only pay for the portion of the car or truck that you actually use, your monthly payments are 30%-60% lower than for a purchase loan of the same term.
• More Car, More Often - Since your monthly payments are lower, you get more car for the same money and drive a brand new vehicle every two to four years, depending on the term length of your leases.
• Fewer Maintenance Headaches - Most people like to lease for a term that coincides with the length, in months, of the manufacturer's warranty coverage so that if something goes wrong with their car, it's always covered.
• Lower Upfront Cash Outlay - Most leases require little or no down payment, which makes getting into a new car more affordable and frees up your cash for other things. However, you can choose to make a down payment, or trade in your old vehicle, to lower your monthly payment amount.
• Lower Tax Bite - In most of the U.S. and in Canada, you don't pay sales tax on the entire value of a vehicle when you lease. You're only taxed on the portion of the value that you use during your lease. The tax is spread out and paid along with your monthly lease payment instead of being paid all at once.
• No Used-Car Hassles - With leasing, the headaches of selling a used car are eliminated. When your lease ends, you simply turn it back to the leasing company and walk away, unless you decide to buy it or trade it.
• Gap Coverage Included - Most leases automatically include free "gap" protection in case your vehicle is totaled in an accident or stolen, and you still owe more than the vehicle is worth. Loans do not.
Even with all of the above benefits, car leasing requires more discipline and commitment than buying. Therefore, you'll want to examine your motives and qualifications to determine if you are a good leasing candidate
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