Both car financing and car leasing have a wide range of benefits. When deciding between car finance vs. car lease, it is important to know what features and benefits suit you. In addition to suitability, you should focus on factors like affordability and nature of use. When it comes to expenses, leasing holds a clear advantage over financing a car. Here are a few reasons that you should get a car lease instead of financing:
- Lower monthly payments
When looking at car finance vs. car lease, the costs involved in leasing a car are usually much lower as compared to financing one. Not only does leasing involve minimal down payment, if any, but there are also no sales tax requirements. You may face extra charges upon returning the vehicle at the end of the lease term. However, these charges are only applicable if you travel more than the mileage limit, end the lease prematurely, or damage the car. So, if you use your car as per the terms of the lease, you don’t need to pay extra. - Paying just the right amount
The term for a car lease usually spans between one and four years. The monthly payment you make is derived from the total depreciation of the car while it is under your lease. When leasing a car, you only have to pay for its depreciation during the lease term, which prevents you from going upside-down. An upside-down situation is one where a car owner is liable to pay more than the car’s worth when financing a car. It is worse when financing a used car. - Fewer expenses on repairs
If you have a warranty from the manufacturer for your lease, you are safe from any unexpected repair costs. You still have to spend on maintenance, regular upkeep, and at least the minimum auto insurance amount according to the state you live in, but there is coverage with the warranty. - Driving new cars
In the car finance vs. car lease debate, leasing a car is advantageous as you can drive any new car available with the dealer after your existing lease has ended. This new car could have superior technology, safety, and additional comfort features. When you finance a car, you may not get a new model easily because it may cost you a fortune. - No hassles with selling a car
Upon the end of a lease term, you can simply return the rented car. You never have to bear the hassle of selling your car or worry about whether you will receive a fair value for the trade-in. Another option you have is to buy the car you were leasing at a predetermined price. This option can be good or bad depending on the car’s worth. If the vehicle’s actual value is above the pre-set price, you should consider buying the car. In the other case, returning the car and getting another is a better option.
