Car Leasing - Who Benefits From A Car Lease?

By Jeffrey W Anderson

The television, internet, and newspapers are filled with advertisements from car dealers touting super low prices on leasing a car. Many individuals are confused with the lease process and completely rule it out as a viable option when searching for a new car. Although leasing a vehicle does not benefit everyone, many car owners would greatly benefit by leasing a car instead of buying one, either new or used. If you are wondering if you will benefit from a car lease, consider the following thoughts:

Average Annual Mileage

If you drive your car over the river and through the woods…and then some, then leasing may not be right for you. Generally, car leases have a strict mileage maximum and you are heavily penalized if you go over this distance limit. Although this distance differs from lease to lease, the average limit for annual miles allowed in a leased vehicle is around 15,000 miles.

If you can easily stay within that mileage limit, then leasing a car may be a great option for you. However, if you will blow through those given miles several times over, then you should think again about leasing. Many car lease companies charge as much as $800 for an additional 4,000 miles driven over the mileage limit—and the charges can get steeper depending on how many miles you drive over the limit.

Low Out of Pocket Costs

If you need a car for transportation but do not anticipate on driving it a great deal, then leasing works out as an excellent option. Many individuals who have a car lease enjoy the low out of pocket costs when it comes to bringing the car home. Instead of hefty down payments typically associated with buying a car, leasing a car requires a small down payment or none at all!

Additionally, the initial taxes or fees usually tacked on to the cost of a new car do not apply to lease cars, so you can easily start a lease with a couple of hundred dollars instead of the thousands you would need when buying a car. Furthermore, instead of a hefty chunk of your monthly salary going towards a car payment, the lease payments are generally a great deal less expensive since you only pay for the depreciation of the car’s value during the lease period.

No Need for a Loan

Since you will not have to try to finance the entire cost of the car, leasing a car is great for individuals who would otherwise need a loan. Many banks severely restrict giving car loans to individuals with outstanding debt, including a mortgage, medical bills, or student loan payment. Leasing a car is an excellent way to bypass the banks and skip the entire loan process. If you find yourself unable to get a loan or will be forced to pay extremely high interest rates, think about leasing a car instead of buying one.

Newer Cars More Often

If you are a car lover and are constantly craving that new and improved model that just hit the showroom floor, then consider leasing a car. Leasing is a great way for individuals to continually exchange cars for the newest model without having to lose the money invested if they were to continually buy and sell cars. If you plan on keeping a new car every year or every couple of years, leasing a vehicle is probably your best option over buying.

Whatever you decide when it comes to leasing a car, do your research and choose a company and car that will meet your every expectation. Know the exact terms of the lease agreement, including any potential charges that may be incurred at the termination of the lease.

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