Debunking the 4 Myths Associated with Car Leasing

There are so many outrageous myths associated it with car leasing. With cash rebates being offered by manufacturers hurting the resale value of cars, low-interest car leases are slowly gaining the respect they deserve among car buyers who want low monthly payments. If you are in a market for a new car lease, here are five myths that you should know to make an informed and prudent decision.

Myth 1: You will get a bad deal with car leasing

On the contrary, you can enjoy a fantastic deal if you negotiate to buy the car at the end of the lease period. If you retain the car after the lease period comes to an end, you will save money buying it. You can also save money on a car lease if you look at the deal carefully. Sometimes not purchase the car at the end of the lease is a better option than buying it. So, study and analyze the car lease carefully before you decide to buy or walk away at the end of the lease. It should benefit you in either case.

Also, in many states in the US, you pay taxes just on the actual lease payments. So, you can benefit from this, as many car lease providers don’t really need you to bring hard cash to the table.

Car Leasing Myths

Myth 2: You cannot negotiate a good lease

Every aspect of a car lease is negotiable, as long as you understand the lease jargon. The capitalized cost of a car is nothing but the price of the vehicle. Make it a point to bargain and haggle over the price just like you would when you buy a car. Don’t press the button for an inflated residual value just to keep your monthly payments low.

Choose a more realistic value, since this will give you more freedom to sell your lease or trade your vehicle halfway through your lease. You also want to pay attention to a car lease’s money factor. It should be low to benefit you. So look for a car dealer who reveals the money factor and offers a realistic residual value to obtain a solid lease that benefits you.

Myth 3: As an individual, you cannot get a tax break on a car lease

On the contrary, you, as an individual, can enjoy a tax break on your new car lease. In most states, a person who leases a car has to pay sales tax on the monthly lease payments and not on the actual price of the vehicle. This reduces the taxes you owe and makes car leasing more attractive.

Myth 4: When turning in the leased car, you will have to pay a huge fee

Usually, car leasing companies have a restriction on the annual mileage you can enjoy. This is limited to about 10,000 to 15,000 miles. If you exceed this restriction, you will have to pay a penalty for every mile you exceed. So, it all boils down to your negotiation skills. You can negotiate a higher annual mileage, but this will mean a higher monthly payment. However, if you compare it to the penalty, it will be a money saving option.

Now that the myths on car leasing have been debunked, it is time to take a closer look at car leasing. It can be one of the most beneficial decisions you could make in your life.