When Leasing Is A Better Choice Than Buying A Car

We think that the right financial decision when it comes to a car is obvious—purchase it. While that’s true most of the time, there are instances though that it’s better to just lease. What are those instances? Read more and find out!

Unstable Monthly Cash Flow

If you don’t have a fixed monthly income, it’d be difficult to finance a car because monthly payment is often higher when you purchase it. With leasing you’re basically just paying for the depreciation of the car during that year rather than the entire cost of the vehicle that’s why it’s cheaper.

Inadequate Savings, But Can Afford Monthly Payment

Sometimes, people have a fixed monthly income so they can afford monthly payment. However, you don’t have a lot of savings which will make it difficult to pay for the down payment and other initial fees. If you're concerned about the monthly costs, a lease eases the burden a bit. Generally, the monthly payment is considerably less than it would be for a car loan. Some people even opt for a more luxurious car than they otherwise could afford.

You Don’t Drive That Much

There are people who don’t drive every day because of reasons like their work is just walking distance, commuting is a faster route, or you and your friends prefer carpooling.  In this case where you just use a car occasionally, leasing is a better option than buying because what’s the point if you won’t be able to use it that much but you’ll pay for the entire cost anyway?

You’re Very Meticulous With Car Care

Those who always get their car bumped, scratched, or dented, just buy it because the wear and tear fees will cost way more. But if you treat a vehicle like a fragile glass, this won’t be an issue for you if you just lease.

You Only Drive For Business

For those whose job requires them to drive around a lot, leasing can be great. When you lease, a portion of the car’s depreciation and financing costs can be deducted on your taxes. Interest on loans to buy a car, however, isn’t deductible. That’s because the IRS allows you to deduct both the depreciation and the financing costs that are part of each monthly payment. If you’re leasing a luxury automobile, the amount you can write off may be limited.

You’re Only On A Vacation

Let’s say you’d be staying abroad or a remote location for just a couple of months, it won’t really be ideal to buy a car during your stay there, would it? So leasing it is. Even if you have the cash to instantly buy a car, it doesn’t mean you have to buy one right away. There are other costs like car registration, fuel, and monthly amortization that should be considered first, as well as other priorities that could enter while you’re in a long term commitment of owning a car. Buying a car impulsively can lead to regrets, especially when you’re not even going to be staying in that place for a long time to begin with.

You Hate Dealing With Car Repair

Yes, everyone knows that car repair is a part of owning a car. But that doesn’t mean everyone is really good at handling that part of vehicle ownership. It seems taking your ride to car servicing for maintenance or repair is simple because you’d just have to take it there and someone else would have to deal with it. However, the stress, money, and time that one has to spend on that are not always worth it for everyone. In this case, leasing is your new best friend because several dealerships offer the coverage on the maintenance which can be a huge deal for many. Many new cars offer a warranty that lasts at least three years. So when you take out a three-year lease, most of the repairs should be covered. Leasing arrangements largely eliminate the hazards of a significant unforeseen expense.

No Resale Worries

Are you the type of person who hates to haggle? If so, you probably hate the idea of selling your used car to a dealership or a private buyer. With a lease, you simply return the car. The only thing you have to worry about is paying any end-of-lease fees, including those for abnormal wear or additional mileage on the vehicle.

Buying a car is hardly a decision you can make on a whim, even when it’s not your first time buying it. So make sure to canvass from different dealers to see different price ranges and different cars available if you do. This way you can compare which dealer offers the best deal for you.

If ever you’re considering to opt for a used vehicle, don’t forget to get the full history of the car. Don’t fall for a pre-owned car just because “it still looks good and yet so cheap”. I tell you what; cars in good condition don’t come cheap even for a pre-owned one. Test everything! Ask the seller if the car crashed before, if there are any current liens, if it has been customized. Rule of thumb: If it sounds too good to be true, it probably is. Or better yet, you may want to consider leasing for the time being until your situation becomes more secure enough to make a big purchase.