Part 6: Benefits of Leasing Leasing can provide many benefits in
addition to lower payments
Automobile leasing can be an attractive
alternative to purchasing for many people, although not for
everyone. Leasing has some disadvantages, so make sure that
you understand all of the benefits and disadvantages of leasing
before making your decision.
No Down Payment Financing - Leasing eliminates the down payment
required when purchasing a vehicle.
With 100% financing available,
leasing allows valuable cash to be
used for other purposes. If
you want, you can make a down-payment to lower your monthly payments.
Lower Monthly Payments - With leasing you pay
for the portion of the vehicle that you actually choose, not the entire
vehicle. Since leasing is a lower cost means of
financing your payment will typically be 25% to 50% lower
than a loan payment, saving you hundreds of dollars each
Get More Vehicle For The Same Money - A
significant benefit of leasing is the option of driving a bigger, more
expensive vehicle for the same payment when compared to buying. The choice
is yours: The identical vehicle for a smaller payment, or a more expensive
vehicle for the same payment. You should never get more vehicle than
you can afford, whether buying or leasing.
Flexibility: payments tailored to individual
needs - Leasing provides many options in creating a monthly payment best
suited to your needs. Because of this flexibility, leasing a vehicle is
easier than owning one.
Fewer Maintenance Problems - Leasing means that your
car is under manufacturer's warranty for the majority of
the lease term. You will have fewer maintenance
issues and most will be covered.
Tax Benefits - Tax laws overwhelmingly
provide better tax benefits when leasing for business use, with the payment
being fully deductible, except for the lease inclusion. This can be a
major consideration for expensive business sedans.
In addition, in most states, you don't pay sales tax on
the entire vehicle when you lease. You are only
taxed on the portion of the vehicle you use, and the tax
is spread out over the monthly payments.
Leasing is Better for Your Credit - For individuals, leasing has less of
an impact on your credit than a loan. For
businesses, leasing is considered off balance sheet, and
doesn't count against many loan covenants.
No Used Car Hassles -
trade-in hassles. At the end of the lease, just turn in the car and keys to
the leasing company. Plus, you have the option of
purchasing it if you want.