Consumers have many financial options available to them when it comes to making large purchases. There are a myriad of creditors who will sell to a person with good, bad, or no credit at all. This assures many buyers that they can have what they want, but depending on the condition of their credit, the purchased item may be higher if financed. In today’s market, car sales are increasing yearly. People will make sacrifices to get a new or used vehicle, and this can be accomplished easily with the various options that are offered by dealerships and financial institutions. The most popular trend is leasing a vehicle.
Some may think that leasing is the best way to get a new vehicle on a regular basis without worrying about costly repairs. Leasing may be the way today, but it is not for every car buyer. Many people want the luxury of paying a car off completely, and it finally becoming their own possession high mileage and all. People who lease vehicles are not concerned with the mileage. Many who do a lot of traveling prefer leasing a car to buying a car. The wear and tear on a purchased vehicle belong to the owner, but on a leased vehicle, the wear and tear is the responsibility of the manufacturer who provides the warranty.
As with anything that deals with everyday life, there are some good, and some bad, some pros, and some cons. Ideally, every consumer would love to be able to lease a vehicle as opposed to buying. All of the other concerns of ownership would not be present if the vehicle was leased. Both buying and leasing allows the purchaser to finance a vehicle, but that is the only similarity between the two options. The decision to do either is strictly up to the person seeking the vehicle. Many vehicles are advertised for lease at low monthly payments, but they are usually only for people with a good credit score.
The leasing options for those with questionable credit can expect monthly payments that are far beyond what is advertised. For those who are eligible to lease, there are some definite pros to this option. Some of the positives include, but are not limited to the following.
- Besides having lower monthly payments, leasing is better in the short term because the buyer is only paying for the part of the car that they are suing. The residual value of the car is what the car will sell for after it has been turned in. This is usually determined during the selling process. The idea of only paying for part of a car sounds better than paying for the whole car.
- No down payment is required when leasing a vehicle. If a buyer chooses to make a down payment, they will be making what is called a capitalized cost reduction which will lower the monthly payments, or pay the lease off earlier.
- The person doing the leasing will get to drive a new vehicle every two to three years, and turn it back in as is. Most of the time, these vehicles are damage free.
- During the period of the lease, the vehicle is covered by a manufacturer warranty that covers all repairs to vehicle. This is a big point for those who lease cars regularly.
As mentioned earlier, leasing is not for everyone. One of the cons of leasing is that the owner has to be too careful which can pose a problem in itself. Being too careful can sometimes lead to carelessness, and no driver can be comfortable when they are concerned about the appearance of the vehicle, whether it has some dings in it that are not covered by the manufacturer warranty. Then, there are some drivers who will not consider this as something that they should be concerned about. Often times, a leased vehicle will get treated differently that a vehicle that a buyer is actually paying for, and will become their’s in the long run. Some of the cons of leasing a vehicle are probably what the buyer will think of while making the decision to buy or lease.
- One problem with leasing is that it has mileage restrictions. If the driver goes over the specified miles, it could be very costly. This could amount to an extra 25 cents per each mile over. Drivers who have long commutes to and from a job can easily go over the mileage. This could also put a damper on vacation road trips.
- Normal wear and tear on a leased vehicle is acceptable, but excessive wear and tear on a leased vehicle is the responsibility of the driver. These fees could become astronomical if they are not expected.
- If a driver changes his mind and decide that leasing is not for him, he can turn in the vehicle early, but early termination fees will apply. They will also be responsible for paying the rest of the lease. This includes all payments that are still outstanding.
- Leasing a vehicle means that the driver has no equity in the vehicle. It could also mean facing the rising cost of leasing each time they lease.
- The insurance premiums on a leased vehicle tend to be much higher than when buying a car.
Everyone has their preference when it comes to buying or leasing. For the millions of people who have done so throughout the years, it is the only way to handle driving a new vehicle without worry. For those who have not experienced leasing, there are still many questions. They do not know exactly what to expect, or what is expected of them. The one thing to remember about leasing is that the lower a credit score, the higher the payments will be just as in buying. The vehicle will never be owned by the driver, and the option to customize the vehicle is not there either. Many people, men especially, want their vehicles to represent their personality and character, but with a leased vehicle, they have to be satisfied with what the vehicle already comes equipped with.
To lease an object is the same as leasing a residence. It never belongs to the person making the payments, but they will receive enjoyment from it because if is what they have chosen. They can have all of the benefits of ownership as long as they take proper care of it, and turn it back over to the person who leased it to them in perfect condition. Just as a person who leases an apartment loses their security deposit if the residence is damage, the same applies to a leased vehicle that has had abnormal wear and tear. Leasing is a great option for obtaining the vehicle of choice, and riding in style. A driver who is thinking about leasing should start the process by making sure that their credit score is top notch.