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When shopping for a vehicle, your first instinct may be to buy. There is, however, an alternative that could also be worth considering — car leasing. So why leasing a car is smart? The car leasing deals in 2021 show an increasing success and gain more and more followers who consider it as a smart way of saving finances and driving your dream car at the same time. Moreover, it will have the foreseen development in a few years.
Leasing a car in 2021 is a good way to save money and make use of a nice new vehicle. You agree on 2 to 5 year leasing contract with some conditions. It gives you a chance to spend your finances wisely with relatively cheap monthly payments. You have your down payments, fees and warranty covered after the negotiation process. Short-term commitment makes your life easier without the hassle of constant maintenance. There is no need to stress about the market change and depreciation as if you had to trade up your pre-owned auto. Reliable leasing companies provide you with a door-to-door service so that your car is literally delivered to your place. Leasing makes the idea of having a car easier, more affordable, and customer-friendly.
According to Statista, the revenue of passenger car leasing in the U.S. will amount to approximately 12,2 billion U.S. Dollars by 2024 meaning that leasing will not stop growing its popularity in the near future.
Leasing comes with some distinct differences when compared with buying. Whether or not leasing a car is a good idea depends on your own individual circumstances, driving preferences, and financial situation.
Borrowers who lease a car are usually looking for smaller monthly payments. They cover depreciation and taxes only for the time you have the vehicle. Smart leasing customers not only save thousands of dollars in purchase costs and running expenses, but they also tap into a raft of tax-saving benefits.
You can afford a wider range of cars — it’s a big reason to lease luxury cars than purchase. You also get the ability to drive a new vehicle every few years.
Leases don’t typically last longer than two to three years. And once the lease is over, you return the car to the dealership or leasing company. The lessee is free to have another car lease deal, buy it for residual value, or just walk away. There can be more fees with leasing. Some of them are a termination fee or a wear-and-tear fee at the end of the lease.
Everyone’s preferences differ when it comes to what they want out of a car. So for some borrowers, leasing is a great deal. And there are reasons why.
Car is not always an everyday necessity. Sometimes it’s only a tool for a particular period of time. For example, you are going to take a job in a remote location and only need a car for one or two years. It may be more cost-effective—and less hassle—to simply get a car lease deal for only as long as you need it. Another example is your lifestyle.
For your immediate needs, you may want a certain type of vehicle. But know you’ll need something different just a few years down the road. If you just got married and are expecting to have kids, you may want to drive something fun for now but will need a minivan later.
Typically lease payments will be lower than loan payments. It works like this because you only pay for the depreciation of the vehicle during the time of the lease, plus interest, rent charges, taxes, and fees.
While loan payments are based on how much you owe on the price of a vehicle, lease payments are based not on the car’s retail value. It is based on the amount of the car’s value that will depreciate during the lease.
Leasing can be a great deal for borrowers who want to spend less on their vehicle but still want that new car smell.
Unlike loans, car leasing deals usually don’t require any money down. Grand Prix Motors provides zero down payment by default and if you want to put some upfront money it is better to consult your personal lease expert.
You may want to do so because it is going to work as a capitalized cost reduction. It means that the upfront payment will make your monthly payments reduced. And you agree on it with your lease expert, particularly to your make and model.
It may include the first month’s payment, a refundable security deposit, down payment, taxes, registration fees, and possibly other fees.
Your lease agreement will specify who must pay for maintenance and repairs during the lease term and what kind of car insurance is best in your case. It may include the ‘wear and tear’ chapter and state how specifically your car is expected to fit normal wear and tear condition.
Normally leased cars are brand new, which means they’re covered under the manufacturer’s warranty. A warranty can offer customers peace of mind and security from possible damage.
You drive the leased car for the most trouble-free years as the car is equipped with the latest features and technologies. Car leasing deals typically end before cars require major service or new tires, so maintenance costs are usually low.
When your car is leased you don’t own it to sell to trade-in afterwards. At the end of your lease term, you simply return the car back to the leasing company and have a chance to choose your new one. All the hassle of selling the vehicle is now the company’s responsibility.
But even if you do want to own your leased vehicle, you can buy it. Most often, the value of the car at the end of the lease term will have already been decided when starting the lease and it is named residual value.
You have the first right of refusal to purchase your leased vehicle for the residual value. This way you get your car and don’t spend extra money as the depreciation is already enrolled.
Leasing also gives you flexibility and a way to avoid the commitment for the long term. If you like to change your wheels every three years or you like to keep up with the new technology then leasing is probably right for you.
Once the lease term is up, you return the vehicle to the dealership and lease a newer and more technologically advanced car. If you don’t get emotionally attached to your auto and enjoy the benefits of reliable new models, leasing has it all.
Do you only drive your car a few days per week or use it for occasional trips? Well in this situation buying and maintenance may cost a fortune compared to the driving intention.
Lease contract will include the agreement of the number of miles you are going to drive per year. Usually, the mileage limit goes from 10 000 to 15 000 miles a year. But if you don’t drive that much, you may save some money. Just as with any vehicle, your leased car depreciates in value as you accumulate more miles.
So when you have a smaller amount of annual miles, the residual value will grow and reduce your monthly lease payments.
Last but not least reason why leasing a car is smart goes to the tax issue. Naturally, you will pay some deductible taxes. If you use your car for business purposes, a lease will often afford you more tax write-offs than a loan.
According to IRS leasing allows you to deduct the standard mileage rate for the business miles driven or claim actual expenses, which would include lease payments. An income inclusion amount reduces both of these deductions. For more detailed information our lease expert will provide you with a Free Consultation.
Leasing is not a solution for each and everybody. But for many customers, it’s the best way to save time and invest wisely. Leasing offers you perspectives that no other way of financing could possibly do. If you look for low monthly payments, a new car every few years, and no selling hassle, leasing could be a better alternative.
Grand Prix Motors will provide you with a transparent, exclusive, and most convenient for you lease experience. Click here to get in touch with your personal lease expert.
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