Car leasing is more beneficial than buying in several scenarios.

  • If you don’t have cash for a car purchase.
  • If you desire to drive a car out of your financial means.
  • If you will not increase the mileage cap as mentioned in the lease agreement [generally between 10,000 to 15,000 miles annually]
  • If you are capable to take proper care of the interior and exterior, especially avoid spills, nicks, or other surface damage.
  • If you expect to trade in to another car when the existing lease contract expires.

However, before you visit the Lease A Car Direct Specials to shop for your dream car understand the difference between buying and leasing a car.

Ownership

The key difference in leasing and buying a car is its ownership. If a car is purchased you own the title and can keep it for as long as you desire. When you lease a car then you are paying lease payment to the bank for some specified years after which you will return or trade-in the vehicle.

Monthly premiums

Auto leasing is preferred because of lower monthly premiums. It is found to be up to 30% less than buying a vehicle.

Down payment

When you buy a car, the down payment is generally 10-20% and you get a suitable financing rate. Leasing needs low or no down payment at all depending on your credit. If you are tight on cash then leasing gives you great leverage.

Ownership length

The time the car is in your possession defines the ownership length. In terms of, purchase the car can be kept until you drive till the engine depreciates and stops working. Leasing a car comprises of an agreed duration, which is generally between 2 to 3 years. It means the ownership of a leased car is limited. In case, you desire to return the lease car early there are termination penalties.

Car turn-in or trade-in or selling

The purchased car gives you the right to do whatever you like. You can either sell it or trade-in. With a lease, you can trade-in, buy or hand the key. The drawback is if you return the key and walk away, there is no equity.

Future value

Over time the value of assets like property gets appreciated, so you invest in real estate for future profits. However, vehicles depreciate and lose their value over time. Therefore, leasing is the practical option as you will never earn any profit from it.

Term expiry

It doesn’t matter, if you lease or buy, both alternatives have a specific time, where you will need to make monthly payments. With a car purchase, you will need to pay until the entire loan amount gets paid. If you have some extra money you can pay extra every month and complete the loan sooner. Alternatively, with lease there is no such advantage; you make payments until lease expiry.

Mileage

Leasing accompany mileage limit, which is around 10,000 to 15,000 a year. If your mileage increases, when you return there will be a need to pay extra on every mile used. You get limited mileage on auto leasing, so long road trips or long commutes needs to get seriously considered when leasing.