The Benefits of Leasing a Vehicle
When it comes to vehicles there are two main options: buy your own or use public transport/ ridesharing. But what if we told you there’s a third option? Some of the best programmes offer the opportunity to lease . So, what does leasing mean? Investopedia tells us to think of leasing a vehicle like renting an apartment; you make monthly payments while you enjoy temporary use of the vehicle. Today, we’re going to look at some of the benefits of leasing to determine if it’s the right option for you.
Approval is Easier
Anyone who has ever taken out a car loan will tell you that you’ve got to jump through a lot of hoops. If you’re a young professional of if you’re re-entering the work force, you may not qualify for a loan or you may need to get someone to co-sign… and that’s a big ask. If you’re self-employed, banks may ask for a ton of documentation to prove that you can afford a loan. However, the qualifying criteria for a lease are much more relaxed than a loan. That doesn’t mean that there are no strings attached; many leasers do still require a down payment/ security deposit for car leasing.
The Best Leases Include Benefits
The truth is that not all car leases are created equal, but the best leases will offer you more than just the car. For example, your car lease should include vehicle insurance and, ideally, this should be fully comprehensive. Further benefits, like GPS tracking or 24/7 roadside assistance will ensure that whether your tyre is flat, or your vehicle is stolen, you’re not alone. Ultimately, leasing can simplify your life by removing the administrative aggravations of getting a car. You make one payment and that covers your vehicle, your insurance, your comfort, and your safety.
You Can Upgrade your Vehicle
If you’re a car owner, you’ll probably have to sell your vehicle before upgrading. However, selling a used car involves many pitfalls, like a protracted wait time, and the risk of losing money if your sale price is below market value. Contrastingly, upgrading a leased vehicle is much easier. For example, a lessee would ideally trade in their car after about three years. The leaser would first consider the vehicle equity; if the vehicle’s current market value is below what you owe, an upgrade won’t be possible. However, if the market value is above what you owe then you can upgrade the car and you may even have enough positive equity for the down payment or security for your next vehicle. If you’re someone who enjoys the most advanced car technology, leasing may be a good option.
You Can Eventually Own the Vehicle
Some people may prefer a car loan to a lease because, when your loan is paid off, you own the vehicle. The biggest drawback of a lease is usually that you make regular payments for property you’ll never own. However, some programmes offer vehicle ownership by the end of your contract so you’ll derive all the benefits of leasing while avoiding the biggest pitfall.
To get the best deal, shop around to make sure you choose the best vehicle leasing option. You can use this blog as a guide to help you ask the right questions. You can also ask your friends and family if they’ve ever leased a vehicle and you can always reach out to a financial advisor for help.