Leasing your car can offer several advantages and be an attractive alternative to purchasing. It's not for everyone, Be sure to discuss your situation with our trained professionals and your Tax person.
Advantages of Leasing:
Lower Monthly Payments
Because you only pay for the portion of the car or truck that you actually use, your monthly lease payments are lower than that of a traditional loan for the same car and same term.
No Down Payment
Leasing your vehicle provides the option of making no down payment, although you may still be required to make the first month's payment and official tag and registration fee. There is the exception of some promotional lease deals which require a down payment to get the payment and terms you desire.
More Car, Less Commitment
Monthly lease payments are lower than with the traditional loan, so you can get more car for the same payment and drive a new vehicle every two to four years, depending on the term length of your lease.
Fewer Maintenance Headaches
Most people like to lease for a term that roughly matches that of the manufacturer's warranty coverage. This means you only have routine maintenance on your vehicle and if you have any problems with the car, the repairs are always covered by the manufacturer.
Lower Sales Tax
In most states of the United states the lessee doesn’t pay sales tax on the entire value of a leased vehicle where on a purchased vehicle you would. You pay tax on the monthly payment and which is in most cases included as part of your monthly payment verses being paid all at the time of purchase.
Turn in and Walk away
Leasing allows you the option of turning you car back in at the end of the lease. You also have the option of purchasing your leased vehicle at the end of your lease for a prearranged value.
Early Termination Cost
If you must terminate your lease before it’s end, the cost can be much higher than you might think. Most people choose to end their lease at the end of the term to avoid any additional early termination costs.
Little or No Ownership Equity
The trade-off for low monthly lease payments is that you typically do not build ownership of your leased vehicle. It is not uncommon that the market value of a vehicle at the lease-end can be higher than the price specified in the lease contract(purchase option) meaning you may have some equity that may be able to be used to lower the price of your next vehicle.
Excessive Mileage Charges
If you drive in excess of the mileage allowance stated on your lease contract, you will be charged for the extra miles at a specified per-mile rate. Usually a reasonable $0.18 to $0.25 per mile but this does vary from contract to contract.. A large over-mileage could result in a hefty charge. Miles are cheaper to buy upfront than when you turn in the vehicle, so discuss your needs with our leasing professional.
Excessive Wear-and-Tear Charges
You are expected to return your leased vehicle at lease-end with normal wear and tear. Thing like excessive dents, scratches, or unrepaired accident damage, will result in you being charged for them. Most leasing companies clearly specify what is considered "excessive" so that you'll know if you should get it repaired before returning your vehicle. Having the repairs done yourself before you turn the vehicle in avoids being charged at a higher rate than a local repair shop might charge you.