As a car buyer, you know you will not have the money to pay the whole amount for a new car. So, what do you do? You take an auto loan to become a proud owner of a car. But have you ever thought of leasing a car instead of buying one? Leasing a new car is another type of new car financing. It has its advantages that you may not be aware of.
Leasing a New Car Benefits
As mentioned earlier, leasing a car is quite similar to taking a loan to purchase one. However, there are a few differences.
- More for Less: When you press the button for car leasing, the lease amount is based on the percentage of the car value. Basically, when you take an auto loan, you get the loan based on the full price of the car. On the other hand, if you go with leasing, you will pay the difference between the price of the car and the anticipate value of the car at the end of the lease period.
So, if the car you want is priced at $30,000 and then after three years the value of the car is perceived to be 55 percent ($16,500), you will have to make payments on the remaining amount, which is $13,500 in this case.
- Enjoy Warranty: Typically, a lease for a new car lasts for about three years. This is the same duration as a bumper to bumper warranty offered on new cars. So, during the lease period, you will be able to enjoy a warranty for any repair that crops up. However, don’t forget car maintenance, such as tire rotation and alignment, oil change and manufacturer recommended maintenance, is still mandatory or you could end up paying a fee when you return the car at the end of the lease period.
- High-tech Features: If you are the kind of car owner who keeps changing cars every few years to ensure your vehicle has the latest and state-of-the-art features, leasing is a better option. Each new car you lease will have the latest features and you will never have to worry about obtaining a decent price when you decide to sell or trade your car for a newer model and different make.
- Better Option for People with Limited Savings: If you have not saved up enough to make a down payment on your auto purchase, a lease is just what you need. There are car leases that do not require down payment or offer negotiable down payment. However, remember your monthly lease amount will increase if you opt for a low or zero down payment lease.
Of course lease on new cars have their own set of disadvantages, such as a restriction on the number of miles you can drive or making alterations to the vehicle, but the advantages of new car leasing outweigh the disadvantages. If you don’t want to build equity in your car and want to stay mobile, leasing a new car is a better option than buying one.