Reasons Why You Should Consider A New Car Lease Instead Of A Purchase

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Reasons Why You Should Consider A New Car Lease Instead Of A Purchase
If you are in the market for a new car, you might want to consider new car leasing as an option to buying. There are many advantages when you lease in comparison to an outright purchase. The one thing that you need to be clear about ahead of time is that when you lease a car, you are not buying it. All of the considerations in regards to your credit history apply the same way as they do when you want to take a loan for a car.

There are many advantages to leasing and if done correctly, you may find it the better way to go. The most common misconception is that most people think it is more important to have a vested interest in the car, therefore they decide purchasing is better. Realistically, a purchased car is a horrible investment because after the loan has been paid off, what you are left with is any value remaining after depreciation and interest.

New car leasing, on the other hand, might be a better option because you only end up paying for the part of the car that is considered used during the life of the lease. Your monthly payments will be the only amounts that will be taxed and you will more than likely have an option of not paying a down payment. If you consider that a car's total worth depreciates over time, then by leasing instead of purchasing, you will not have to pay for all of the depreciation.

Another benefit of new car leasing is the way monthly payments are calculated. As mentioned earlier, not only are you not paying sales tax on the lease, but because the total amount of the car is not being financed, the monthly lease payments should be much lower than loan payments on the same vehicle.

If you live close to work and do not find yourself traveling any great distances, the mileage aspect of new car leasing might be a benefit to you as well. All auto leases will have mileage restrictions on them. This is one of the ways a car dealership will be able to put value on the car over the period of time that it is leased to you. The total mileage you are allowed will normally be enough for most people and in some cases can even be negotiated. Be aware though, that going over the mileage specified will cost you additional cash at the end of the term.

Finally, the one thing that offers the most benefit from a lease program is that you get to trade the car in for a new model every two to three years. With a conventional purchase, you will find yourself making payments for five to six years only to be saddled with a car that has a fraction of the value and quite possibly the beginnings of mechanical issues as well. That can easily be avoided with new car leasing.