The car market can be overwhelming for new or veteran drivers. There are so many options and you may have your sights set on a certain type of vehicle all while searching for the best prices. How much car insurance you need is also smart to consider when making car-buying decisions, but adds to the complication.
Factoring the cost of car payments into your budget may be the basic thing that guides your choice — and that may mean deciding whether to lease or buy a new car. Here are a few reasons why leasing a car may be your better option.
No down payment
Yes, you may need to pay fees and perhaps the first month’s payment upfront if you decide to lease instead of buy. But you also may find that less money is needed to pull together for a leased car than it is for the down payment if you’re buying a car.
Some down payments when purchasing a car may be up to 20% of the car’s value. Compare the monthly payments for leasing and buying the same vehicle — you may be surprised to find that a monthly lease could be lower.
Pro tip: Do your research on how to get a loan for a car before you go into the dealership. That could make the decision to lease or buy a vehicle easier, and it may help narrow down the best car for you.
No long-term care
The first years of a car’s life tend to be its best years. You may not have to worry about extra maintenance and fixes beyond oil changes and fluid checks. Items like new tires, brake pads, or batteries can usually last several years before they need to be replaced, and by then, you may have already returned your lease car.
Pro tip: You also can get the most up-to-date features on a new lease car that may not be available on a car you’re buying. That could mean some nice upgrades like heated seats or touchscreen navigation, but it also may include safety features such as side airbags and traction control.
When you’re looking for a new lease car, talk to the dealership about what kind of warranty and maintenance deals may come with it. Potential mechanical issues could be covered. Dealers may also include a certain number of oil changes or basic maintenance like tire rotation.
Depreciation isn’t your problem
Some investments go up in value the longer you hold on to them. Cars, however, do not in most cases. In fact, your car may begin to depreciate in value as soon as you drive it off the lot due to the wear and tear it will face in its time with you.
If you buy a car, that’s something you may have to factor into a sale price when you’re ready to get rid of it. But if you’re leasing, the burden of dealing with depreciation will more likely fall to the dealer when your lease is complete and you turn in your car.
You could upgrade
Typically, a lease is about two to three years, but some car providers are now offering longer options. Once the contract runs out, you can turn the car in to your leasing agent and not have to worry about it again. For many who lease, this means you now have the option to get a new car with a new lease. Perhaps you want a car with more upgrades or you want to downsize your vehicle. With a lease, you have the ability to get a new car every few years with details that best fit your needs at that moment.
Selling it is never a concern
When you own a car, getting rid of it could be complicated. You may decide to trade it in and get credit toward a new car, but it could be hard to get the most money for your trade-in. You could also try to sell to a used car dealer, which can have varying results. Or you might decide to sell it on your own. A private sale, however, comes with its own complications. With a leased car, you simply have to turn in the keys.
Leasing a car may not be the best option for everyone, but it’s a good option for drivers who want some flexibility with the cars they drive. Compare the monthly fees, consider any maintenance, and compare car insurance costs that come with both options, then decide which one may be best for you.