Although leasing offers many benefits, it is not for everyone. Leasing can be an expensive mistake. Before you seriously consider leasing you need to ask yourself the questions below. If you answer yes to most of the questions, then leasing may offer benefits to you.
If you trade-in your vehicle before you pay it off, in many cases the value of the vehicle is less than what you owe. You end up having to pay to get rid of your vehicle, and you may have to go through the hassle of selling your used car. Leasing eliminates this problem.
If yes, a 3-year lease might be appropriate for you. Your vehicle will almost always be under warranty and you will always have an almost new vehicle.
Leasing may be a great option for you. Lease it for three or four years and then decide whether you want to keep it long-term or get rid of it. If you had bought the vehicle and decided to get rid of it at the end of three years, you may have to eat a several thousand dollar loss, and you also have to go through the hassle of disposing of the vehicle. Isn’t just turning the vehicle in a much easier option?
There are significant tax advantages to leasing business use vehicles. Remember, this includes any vehicle that is used for business, not just vehicles owned by a corporation. Are you an independent contractor, a real estate agent, sell Mary Kay? You qualify.
When you decide to get rid of your car you often have the choice of trading it into the dealer for less than it is worth or putting an ad in the paper and going through the used car circus.
When you lease a vehicle, your lease payment will typically be lower than the loan payment on buying the vehicle. However, you will always have a monthly payment. The payment will never go away like it eventually will if you purchase a vehicle.
Since most leases don’t require a down payment and you are not building any equity, you generally must have a better credit rating than would be required for a loan. We oftentimes can get you approved, but bad credit is definitely an obstacle to leasing.
If you don’t take good care of your vehicle, you may face some wear and tear charges when you turn it in. If you totally trash your vehicles, you probably shouldn’t lease because the excess wear and tear charges may be prohibitive. But remember, even if you purchase, you will have a difficult time selling a totally trashed car.