IS LEASING A CAR A BAD IDEA?

In recent years, the cost of new cars has spiraled upwards so rapidly, the ability to drive the vehicles we want has become almost unattainable. Leasing is becoming more appealing to the individual consumer because it allows you to drive the vehicles you want, for less money and less hassle.

Though some might hesitate and think “Is leasing a car a bad idea?” It is not a simple question. You should consider all the aspects that affect your choice of leasing or buying a vehicle. Everything depends on your priorities. If you are wondering is now the best time to lease a car – check out our article. We also have a FAQ section on our website which covers top asked questions on car leasing.

You might be the person who is comfortable with a long-term car loan commitment of up to 8 to 10 years and you are aiming for ownership of the car. If you are into mechanics, you are passionate about upgrading and modifying your auto, buying a car might be a better option for you.

But what if you put your convenience first and you just want to drive a new car every few years without the trading-in or selling hassle? You should consider leasing then. Your lease contract will ensure lower monthly payments and a more luxurious range of models compared to financing a car.

What does it mean to lease a car?

When you sign the lease contract you basically agree on renting a car for a fixed length of time and ensure to make relatively low monthly payments.   You choose the lease term that is most suitable for your car and it typically may be 24 months, 36 months, 48 months, etc. When the lease ends, you usually return the vehicle to the company and may get a brand new car. In some cases, you can purchase the vehicle at a predetermined residual value.

What are the pros and cons of leasing?

As you may now think leasing has its obvious advantages. But what about the drawbacks? Let’s find out what are the things you want to know about leasing.

  • Low monthly payments. Leasing will more likely make financial sense to you. Many aspects affect the cost of a lease, like the down payment, money factor, credit score and fees & taxes. Although compared to financing the same car, leasing is going to cost less. The visible difference in cost is explained by the different calculations.  The lease cost is based on the depreciation between the MSRP of a car and the residual value of a car. We covered these aspects in the article UNDERSTANDING CAR LEASING TERMS – part 1. While buying the car you pay for the whole price of the car divided into monthly payments.
  • Brand new car. You get a chance to always have a new-car experience and constantly upgrade to new cars with the latest safety and technology features. As you drive it for the first trouble-free years they will be less prone to mechanical issues.

  • No hassle. When buying, you own the car and have full responsibility for its further trade-in or selling issues in case you no longer need it. Thus all the risks of market fluctuation, depreciation and all the paperwork will be on you. Whereas you lease, at the end of the contract you simply return the vehicle and may get another new auto.

  • Covered costs. With newer leased cars, the warranty may cover any issues you run into. In some leases, the company will pay for servicing or car problems not covered by the warranty.  With newer leased cars, the warranty may cover any issues you run into. Additionally, if you decide to get GAP insurance it will protect your savings in case of damage.

  • No ownership. Leasing doesn’t allow you to own the car so you can’t sell it and make some money back or take advantage of its trade-in value. The modification will also be restricted according to the contract agreements.

  • Restrictions of use. Your agreement will be restricted to the lease term and the number of miles. The mileage usually varies from 10 000 to 15 000 miles per year. It is very peculiar to each make & model and your preferences so the best way to get the specific information is to contact the lease expert to discuss all the details.

  • Possible expenses. Leasing naturally comes with charges. It could be the upfront down payment, lease fees, taxes and deposits. Depending on the conditions of your lease deal you may have the Security Deposit, Excessive Wear & Tear Fee and different DMV fees. This issue is very variable and should be considered for your specific choice.

Is leasing for you?

The main thing that should be carefully considered is whether leasing or buying suits your lifestyle, principles, and priorities. Do you enjoy getting a new car every 2-3 years? Is it important for you to always drive a car under warranty? Do you want to drive more cars for less money out of pocket? So, then leasing a car is the route to go. Check out our article on when leasing a car makes sense. Grand Prix Motors will provide you with a detailed excursion through all options that will meet your needs. Your personal lease expert can answer all your questions in no time and help you make the right decision. The whole process may be done online and you will get your car delivered within 2 days. By choosing Grand Prix Motors, you get the best lease service experience in New York.

#enjoy your freedom with Grand Prix Motors!

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