What’s the difference between leasing and buying a car?
Let Tom Kadlec Leasing help simplify this difficult process by examining the
pros and cons of car leasing and buying.
As the price of cars increase people are financing them longer and longer and therefore rarely own them outright. Buying a car has its advantages, but leasing a new car versus buying a car includes painless budgeting, convenience, and getting the vehicle you want. As the leading provider of auto leasing, we are dedicated to helping our customers decide if car leasing is right for you.
In the past 2 years we have all learned that life can change very quickly. Regardless of employment changes, family changes, or vehicle use changes leasing is more flexible in regards to being set up for shorter terms. Without being locked into a long term commitment it allows for making changes when priorities change.
Leasing most often has a lower monthly payment than a comparable car loan. This happens because during the auto lease term, only the depreciation and rental charges are being charged. By not paying for the entire value of the vehicle the payments can be lower.
When leasing a vehicle the value at the end of the lease term is agreed and set upfront. Relieving any worry or concern about what needs to be done at the end of the lease. The vehicle can simply be returned and a different van, car, truck, or suv can be leased. By having this information upfront it allows a predictable way to upgrade the vehicle and plan for it. Therefore removing any stress of how to get rid of the current vehicle.
Ding, ding, ding!!! This is arguably the biggest common knowledge negative when buying a new vehicle. The initial depreciation is huge and levels out as the vehicle gets older. The value that is left once the vehicle loan or financing is fully paid is a small amount. Our thinking with the lease model is reverse what is being paid on! Instead of committing to pay the entire value of the vehicle and taxes on that entire value, only pay on the depreciation, rental fees, and taxes for the amount of the vehicle you actually use.
If the vehicle is being leased for business reasons there are tax deductions available. Depending on the amount of usage that the vehicle is used for business, it may be able to deduct the entire monthly payment.
According to Statista, on average 30% of vehicles are leased. Many times people are left feeling confused about how a lease works, or even hesitant because “they don’t own the car”. With the many advantages that leasing can provide, the lease should be considered with the large cost of vehicles today. It may turn out to be a great option.
