If you’re in the market for a new car, it’s easy to get overwhelmed by all of the options available to you. However, when it comes down to it, you have two main options: leasing or buying your car outright. Leasing allows you to drive a brand-new car every few years without having to come up with the cash on your own, but there are several things you should know before deciding whether leasing is right for you.
#1: Save Money
When you lease a car, your monthly payments are usually lower than they would be if you bought it outright. And car leasing may help you save even more money in other ways, too. If your leased car is totaled before your contract is up, for example, most companies will pay to replace it with another one. (Some companies may require that you buy out any remaining contract if your old car was stolen or totaled.)
#2: Avoid Depreciation Hassles
When you lease a car, you’re getting a new car every year. This makes it easy to avoid depreciation hassles by just turning in your leased vehicle at its end-of-lease date and trading it in for a brand new one. This method also helps keep your insurance costs down because you never have to claim on your policy for any covered physical damage, such as dents or scrapes, like you would if you owned a car outright.
#3: Avoid Ownership Problems
If you buy a new car and drive it for a few years, you’ll eventually need to get regular repairs done—often at higher prices than average. With leasing, you only have to worry about repairs during your lease term, so even if something goes wrong after you turn in your car, it won’t affect your credit rating.
#4: Get Tax Breaks
Since you don’t actually own your car, you won’t be responsible for taxes and registration. The car leasing company will handle all that, while you enjoy some major tax benefits as well. According to IRS rules, money spent on business travel is deductible, so if a portion of your work takes place in your leased vehicle, that amount can be written off. The same goes for any business-related tolls or parking fees.
#5: Change Vehicles Quickly Without Lost Value
When you own a vehicle, it loses value as soon as you drive it off the lot. As a result, at some point, you’ll need to sell or trade in your vehicle. However, car leasing allows you to take advantage of new car deals whenever they come up without having to go through that hassle. Just return your leased vehicle and get another one. It’s fast and simple!
#6: Share Vehicles with Friends or Family
If you have friends or family who live near you, consider pooling your money to lease a single vehicle and sharing it between everyone. You’ll be able to drive a new car while only paying for half of its cost. Additionally, if you’re not all driving at once, it means that no one has to wait around while someone else is out with their car. A win-win scenario!
#7: Try Before You Buy
Leasing a car is similar to renting a house—but with wheels. Instead of committing to buying a car, you commit to leasing it for an agreed-upon period of time. If you decide you don’t like your leased vehicle before that time period is up, no worries—you can walk away at any time.