Everything You Need to Know About Leasing a Car

Many businesses lease their vehicles and quite a few individuals do too. There are various reasons why they choose to do so. For example, Frost and Sullivan reports that the lease of electric vehicles (EVs) is on the rise simply because of the speed of technological developments in the field is making EV models become rapidly obsolete.

Whether you’re looking for an EV or something else, “To buy or to lease?” is a question faced by many. There is no right or wrong answer to it. It’s situational – what works for you may not work for the Joneses living down the road.

So, how do you know what the right option is for yourself? Read on to learn about the pros and cons of leasing a vehicle as opposed to an outright purchase.

The Main Difference Between Leasing and Buying

When you purchase a car (whether it’s financed or an outright purchase), the title is immediately yours and you own it completely once all the payments have been made. When you lease a vehicle, you have the vehicle with you for a fixed period of time – usually between two to four years – after which it is returned to the dealership. Many dealerships also give you the option to purchase your leased car for a predetermined amount once the lease contract is over.

When you buy a car, the monthly payments stop once your loan period is over. Many individuals look forward to the day when these outgoings stop. However, when you lease, the payments continue monthly. However, the lease payments are typically lower than the payments you make when you buy a car.

The Advantages of Leasing a Car

There are several benefits to leasing a car over buying, including:

Lower Payments

When you buy a car, the monthly payments stop once your loan period is over. Many individuals look forward to the day when these outgoings stop. However, when you lease, the payments continue monthly. However, the lease payments are typically lower than the payments you make when you buy a car. So, you may be able to drive a more luxurious car on a lease agreement than one that you would normally be able to purchase, or save money for other things.

Not many people know they can, but you can also rent a certified pre-owned vehicle through Dilawri Leasing which can be a more cost-effective option.

Flexibility

If you aren’t ready to commit to a vehicle for the long term, or if you know you’ll be moving soon, then leasing can be the right option for you. That way you don’t need to worry about reselling your vehicle when you want to upgrade or move.

Brand New Vehicles

Most car loans last for an average of about six to seven years, after which they can decide to keep the car or resell it if they wish to. However, car leases last for much shorter periods of time – after which you can choose to lease another car. This means you get to drive a brand-new vehicle every two to four years without having to make hefty payments.

Latest Technology

New vehicles for lease are often equipped with the latest safety features and tech. This means you get to play about with the latest advances in car technology every time you lease a car.

Maintenance

As most lease cars are brand new, they are covered by manufacturer’s warranties for the initial two years of your lease at least. This means that you may not have to spend your money on routine maintenance and repairs like services or oil changes.

So why doesn't everyone just lease instead of buying?

While leasing a car can be advantageous, there are a few things you need to be aware of. Financially speaking, leasing over many years can be more expensive than financing to buy as loans stop eventually – leases do not. However, you may be able to write off your lease as a business expense if you use your leased vehicle for work. Ending a lease early may also result in additional charges.

You also need to be careful with a leased car. While most dealerships are reasonable when it comes to wear and tear over a period of a few years, you will have to pay for any excess damage.

Another thing to be aware of is mileage. Leased cars come with mileage limits and you are charged for additional miles on the speedometer at the end of the lease. So leasing is not ideal if you like taking long road trips.

As you can see whether to lease or buy is a highly individual choice. If you are interested in leasing a car, make sure you ask you dealer all the questions you want to and read the fine print carefully before signing the lease.

At White Rock Honda, we can help you make the difficult decisions. Our team of financing experts is here to guide you through all the different financing and leasing options available to you. Get in touch to book an appointment today.