Leasing A Vehicle What Are The Advantages And The Disadvantages
Not everyone is chanced to own a car as it is costly and the maintenance fee required to keep the car functioning properly could be a lot. With leasing a vehicle, you can still be a car owner but only for a specific period. Leasing a vehicle and owning a vehicle has both advantages and disadvantages, but the reason you chose what you want is what matters.
To lease a vehicle means you pay for the car of your choice for a specific period agreed by both the individual and the car company.
Here are the advantages and disadvantages of leasing a vehicle.
1. Low Monthly Payment:
With leasing, you don’t have to save up a huge amount of money to get a vehicle. You can only pay for the difference between the purchase price and the residual value. And interest is not included, unlike the personal contract purchase. Regardless of the car model, the budget will always be lower compared to buying it.
2. Avoiding Extra Cost:
Owning a car includes spending on maintenance, taking it to the auto repair house from time to time. But, with leasing, issues are covered under warranty. If a car is leased with maintenance, it covers the servicing, repairs, and other maintenance routines. Also, the vehicle excise duty which is the road tax is always included in the contract, so you don’t have to spend unnecessarily.
3. Cars of Your Choice:
New-cars are expensive. You don’t want to buy a car today and after a while, another model comes out and you start thinking of how to save up for the new model. Leasing a vehicle, allows you to drive the latest car of your choice, with extra driver’s aid and on additional tech.
- It is Expensive in the Long Run: If you are going to lease a car for two, three years if it’s still new when the value of the car depreciates and your lease is over. It’s either you lease another car or get one which would involve monthly payment for a long period.
- Limited Mileage: Some leases come with a mileage limit which is usually 10,000 to 15,000 miles per year which could be a hindrance if you are the type that travels a lot. Exceeding the mileage limit will attract an additional high rate of payment.
- Requires Good Credit: If you have bad credit, don’t consider leasing. The financing cost of a lease is usually higher than the loan and most lease companies require you to have a decent level of credit and a safe financial situation.
Overall, leasing a car comes with a number of advantages and disadvantages, and you are advised to make your decision based on what you think works for you.