Advantages and disadvantages of leasing
You have likely seen or heard advertisements for new vehicles that indicate purchase prices as well as leasing terms. Perhaps you have always purchased your cars outright in the past and are considering leasing your next one. Is that such a good idea? How different will it be from financing the purchase of the automobile? Let’s go over some of the advantages and disadvantages of leasing to see if this is an avenue you would like to pursue.
New vehicle leasing pros and cons
As with anything in life, leasing a new vehicle has its different pros and cons. Depending on your situation and your preferences, leasing may or may not be the better option for you. Let’s take a closer look.
- Monthly payments tend to be lower, because you are financing the depreciation that will occur over the course of the lease period.
- The down payment also tends to be lower for the same reason. In some cases, a down payment may not even be required.
- The lease term often lines up with the bumper-to-bumper warranty, so many issues you may encounter could be covered by that warranty while you are still driving it.
- You can drive a much more recent or even brand new model that you may not otherwise be able to afford if you actually purchased it.
- When the lease period is up, you do not have to worry about trading it in or trying to sell it. Some leases even give you the option of purchasing the vehicle.
- The vehicle is not yours, thus, you are not able to customize it unless explicitly approved by the dealer.
- Many lease contracts restrict the mileage to a set amount, and if you exceed that amount, you may have to pay additional fees.
- When the lease is finished, you will have no equity in the car.
- The vehicle must be kept in good condition, or you may be held responsible for more charges.
- If you need to exit your lease before the contracted termination date, you could incur early termination fees.
Ultimately, whether you decide to lease your next ride or not depends on your lifestyle and your financial situation and where you expect your financial situation to be over the next couple of years. There’s no universally right or wrong way to get a new car, so if leasing sounds like a viable option to you, have at it! Stay in touch with the Indy Honda blog for more tips and tricks!