Your old car is showing the telltale signs of giving up – the engine is coughing, the transmission grinds, acceleration labors up hills, the body is rusting and the entire interior is, literally and figuratively, coming apart at the seams. You’ve done your research and found the perfect car to replace your geriatric vehicle, but now you have a separate, equally important decision to make.
How are you going to finance this new car? Conventionally, you have two options: you can either buy the car or lease it. (There is the third option of joining a car subscription service, but let’s set that option aside for now, in favor of pitting the two mainstream options against one another).
There are a lot of people who favor buying to leasing, but ask them why and the answer usually boils down to an emotional fixation. You can hardly blame a car purchaser for wanting to own their car. It’s built into the cultural psyche that money should go toward assets, and not necessarily experience. But set aside that hang-up and take a rational look at the benefits of the two, and leasing come out on top.
Leasing is smarter than buying, plain and simple. Compared to leasing, buying a vehicle is expensive, it gets you a worse vehicle, and it attaches you to a car for far too long. Here are a few of the main reasons why car experts believe that vehicle leasing made easy is the way to go.
Stretch Your Dollar Further
Essentially, when you lease a vehicle you pay only for the depreciation of the car during its lease term. Compare this to purchasing, which puts you on the hook for the entire cost of depreciation. Expressed in different terms, this means that leasing is less expensive. The monthly payments are lower and, depending on the agreement, the down payment is virtually non-existent.
Therefore, you can stretch your dollar further. If the down payment and monthly budget you’ve set aside allows you to buy a standard car, that same amount of money will allow you to lease a luxury car. Start getting into leasing used cars (those whose most extreme years of depreciation are behind them) and you can all of a sudden afford a high-end luxury vehicle. Your dollar goes much further.
Drive the Latest, Safest & Best Cars
Own a car, and chances are you’ll be stuck with it for 7-10 years, long enough to see it deteriorate and watch its technologies become obsolete. Lease a car, and you get a new car every 2-4 years (again, depending on the particulars of the agreement).
These relatively brief terms allow you to upgrade your car far more frequently, meaning that you are constantly driving the latest cars. And the latest cars are, by and large, the safest and most technically advanced cars.
Manage Your Monthly Cash Flow
Finally, the reason many people have switched to leasing their vehicles is that it represents a low, predictable monthly payment. You pay a lower amount per month, and that amount never changes. You simply incorporate it into your monthly budget, and use the money you’ve saved elsewhere in the budget.
Don’t get stuck with another clunker in seven years. Get smart about driving and lease your next vehicle.