—TechRound does not endorse or recommend any financial advice or practices. All articles are purely informational—
A car lease allows you to drive a new car within a few years. You can make monthly payments to the dealership or manufacturer. You do not have to pay for the full value of the car. Instead, you only have to pay for its depreciated value and interest, taxes, and fees.
Is Leasing a Car Worth It?
If you’re considering a car lease, think about your lifestyle, financial goals, and your driving habits.
- New Car In a Few Years: If you enjoy driving a new make and model every few years, then leasing is a great option. You can enjoy the latest technology and features every time you upgrade to a new car lease
- Lower Monthly Payments: Monthly payments are lower than paying for the purchase of a new car since you’re only paying for the depreciated value of the car
- Great Deals: You can easily avail yourself of excellent deals and discounts with Vantage leasing offers, end-of-year discounts, promotions, and more. You can even get the benefit of holiday deals during Christmas, Black Friday, and so on
- No Hassle of Resale: Once the lease ends, you can easily return the car to the manufacturer and opt for another one. You don’t have to worry about the resale value, finding a buyer, and so on
- Limited Repair Costs: Most of the car leases end before the manufacturer’s warranty expires. This way, you don’t have to worry about huge repairs or replacement of parts
How Does a Car Lease Work?
Let’s break down the steps of leasing a car.
- Choose the Car – Once you know which car model, make, and year you like, you can look at other aspects. You should opt for a higher mileage limit if you travel a lot
- Check the Price – Just because you like a car doesn’t mean you cannot negotiate the deal. Like any car you might purchase, you can negotiate the lease for lower monthly payments
- Upfront Fees – You will have to pay a few fees upfront (before you drive off with the car). The upfront fees usually include the down payment, car registration, title, taxes, and acquisition fees
- Monthly or Quarterly Payments – Monthly payments work like EMIs for cars you may own. However, the largest difference is that these payments are only made for the car’s depreciation, interest, fees, and taxes. You do not have to pay for the total value of the car, only the depreciation
- Return or Buy – You should look into options once your lease is nearing its end. You can return the car to the dealership or purchase it for the residual value. You may also have to pay for excessive wear and tear of the car
When is Leasing Potentially Not Worth It?
- Ownership of the Car – If you want to own a car, then leasing is not for you. Buying a car outright or taking a car loan is a better option
- Long-distance Driving – Whether you drive long-distance, or a short distance multiple times, leasing is not a good option if you will need to drive around a lot. Your excess mileage fees can end up at the end of each year, resulting in you shelling out more money
- Car Customisations – Leasing contracts do not allow for any customisations, painting, or wrapping of the car
- Want to Keep the Car for a Long Time – If you’re planning to keep the car with you for more than four or five years, then leasing is not a good option. It would be cheaper for you in the long term to purchase the car outright
Leasing a car allows you to effectively borrow a vehicle for some time, use it, and then return it. It is a great option for people who like to switch cars every few years and drive newer models. You can also save money on the car lease if you choose to take it for a few years.
Like with any new loan or monthly installments, you should take care while negotiating a good deal for yourself. Ensure you understand all the terms in the agreement. You should also check about the mileage limits, interest rates, and upfront fees. Don’t be shy about asking questions, and you’re sure to have a fabulous new car in no time.
—TechRound does not endorse or recommend any financial advice or practices. All articles are purely informational—