Car Lease Advantages — ::

According to J. Paul Getty, a billionaire oil tycoon: “if it appreciates, buy it, if it depreciates, lease it.” This statement encapsulates the main advantage of leasing a car. You need to know that a car is not like a house which in most cases appreciates in value after the time of purchase, whereas when you drive away from the car lot, the vehicle that you now own has already lost about 15% of its value and will continue to do so from now on.

If you decide to take out a car loan or finance agreement to buy a vehicle, you will be paying a set amount per month for something that is actually losing its value. In other words, you are acquiring a product that is depreciating in value not only every time you use the car, but also when parked. Leasing is a different alternative for drivers, instead of owning the car; the driver pays a monthly amount to use the vehicle over a fixed period of time (in most cases, 24 to 36 months). When the agreement ends, the car is taken back by the leasing company.

In the following, we’ll provide some of the most important car lease advantages:

a)      The monthly payments that you will make will be on average between 35% and 55% less expensive in comparison to the payments that you would make for a car loan;

b)      In most of the lease agreements, you will pay less for the down payment (usually amounting to 3 monthly payments) when compared to a car loan;

c)       Probably the biggest advantage is that you are able to get a car that in other cases would be out of your price range;

d)      You’ll benefit throughout the entire period of the contract from the manufacturer’s warranty, which also covers the maintenance costs. Usually, the road tax is also included in the lease;

e)      There are no significant up-front costs, capital outlay or car loans;

f)       You’ll benefit from fixed prices as the vast majority of the costs will remain the same during the lease period;

g)      You will have to pay fewer taxes as in most of the states in the U.S. and Canada; you will not be obliged to pay a sales tax on the entire value of the leased car as you would if you purchased the car. You will be taxed only on the portion of the value that you use during the lease. This tax is spread out and paid along with the monthly lease payment, as opposed to being paid all at once;

h)      No need to worry about used-car hassles as with leasing, the problems of selling a used car are eliminated. As we mentioned before, when the lease ends, you take the car back to the company. You’ll have the possibility to buy or trade it.

i)        The vast majority of the leases have a free “gap” protection in case the car is totaled in an accident or stolen, and you still owe more than the vehicle is worth. Most of the loans do not come with gap protection.

j)        You have the possibility to get a new car every 2-4 years and take advantage of the latest developments in fuel economy, safety and performance.

For business owners, one of the most important car lease advantages would be that you will be able to deduct some of the mileage that you made for business purposes. For last year’s tax, the IRS allowed a deduction of 50 cents / business mile travelled. For those business drivers that use the car for more than 10,000 miles annually, that is a $5,000 above-the-line deduction.

Yet another advantage would be that from time to time, certain automakers roll out leasing specials that feature low monthly payments plus accessible down payments. These special offers can be just the right thing you need to get behind the wheel of a new car, without having to worry too much about how much money you have to pay when signing the deal, along with the monthly payments.

In the end we should mention that in order to fully benefit from affordable down and monthly payments, the shape of your credit score should be very good. So, in order to tilt the odds in your favor, check your credit rating and fix any possible issue that might make your payments higher than they should be.

Similar articles:

Can I Sell A Totaled Car?

Post tags: Tags: car lease advantages