How does driving a sweet new car with all the latest gear every few years sound? If you just drooled a little, you’re only human. If you’re seriously considering it and aren’t independently wealthy, leasing might just be the answer. Here are Molle Toyota's reasons to lease your vehicle.
More bang for your buck
Leasing payments are typically 30-60 percent less than they would be for a new-car loan. That means you can get twice the car for the same money or have a little more money in the bank each month for little expenses like food and water. And, there are usually no or low down payments, so you don’t have to scrimp and save first, just to get behind the wheel.
Most leased cars will remain under the manufacturer warranty for the life of the lease as long as you don’t exceed the mileage limitations. That means less out of pocket expense for repairs.
That new car smell
Leasing lets you get a new car every few years. If you like to try things out, but can’t quite commit long-term (as your girlfriend might say), leasing might be a good option. Most leases have a minimum term of just two years.
Leasing also lets you keep your options open. If you’ve fallen in love, you can often buy the car at the end of your lease.
Leasing is less taxing
If you use the car for business you may be able to write off the entire lease payment as opposed to just the interest on a new car loan. Be sure to discuss this with your accountant or tax professional.
One of the biggest concerns people have about leasing is that it’s like renting instead of owning a house. You’re not building any equity. But cars aren’t like houses. New cars depreciate. Quickly.
Cars don’t depreciate at the same rate, but on average, a car will lose 15-20 percent of its value each year. That means if you bought a new car for $25,000, paid it off in 3 years and resold it, you “spent” about $11,000 to own that car for 3 years. But, you had $25,000 tied up in it. If you’d leased a car for three years at the same rate, you would have been able to invest or spend that extra $14,000 on something else.
Tip: Your leasing payment is largely dependent on the car’s rate of depreciation. Cars that hold their resale value well, will cost far less to lease than those that depreciate quickly.
Other restrictions apply
Leasing can be complicated due to mileage limitations and early termination fees, so ask a Molle Toyota sales associate if you think leasing might be right for you. There are many different types of leases available and they all have different nuances. Be sure to research and understand the lease terms before you commit.