A lot has been written about the benefits of leasing or buying your new vehicle. While there are certainly plusses and minuses on both sides, leasing certainly has some major advantages. For those of you who aren't set on ownership, we've compiled some of the main points for you to keep in mind.
One way of looking at a car is that it's a piece of machinery. It's simply equipment used to get to where you need to go. There's no valid reason to own, especially when you think about it as merely transportation and not a valuable possession. You're paying to use the car, not for the privilege of ownership. Why pay for the future value of it? Traditionally you can get into leases for less money down and less monthly cost. Who doesn't want lower monthly payments?
With leasing, you're able to control the cost of your usage and maintenance fees based on time and distance. Those that put high mileage on a car (contrary to popular belief) should lease as the user can exact the cost of usage. The rate for excess mileage can always be negotiated, so you'll know exactly what you'll be responsible for at the end of your term. Once your term is over, you can turn your vehicle in.
We should always lease depreciating assets and not own them. There is no reason to own a car (or anything for that matter) when you know it’s going to go down in value. The argument against this is that when you lease you have a payment forever. That's correct, however, when you own, you have payments that are unpredictable. Future breakdowns and repairs that will naturally occur over the use of a vehicle can't be predicted. Never worry about selling or trading your car in. At the end of the lease cycle, you simply turn the vehicle in. Your dealer will take a report of its condition, and as long as there is no damage or excessive wear and tear or mileage, you're free to choose your next vehicle.
The lease agreement protects you against future loss. A lease is like putting a stop on a stock or buying life insurance. The lease protects you from the downside of eroding market conditions. If the future value of the car were to depreciate more than anticipated because of new models, abundant inventories, or a failed economy, you're protected against future downside with a lease.
The perfect lease would be 24-36 months. (the shorter the better) This way, you're no longer responsible before there are issues not covered by warranty and before models change. Leasing is easier and quicker. Because the manufacturer believes that leasing increases the possibility of renewing a customer on a receptive loyalty program, (repetitive purchases) they make everything easier and quicker. Your dealer loves to lease for the same reasons!