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|The Benefits of Auto Leasing
September 19, 2013
A decade or two ago auto leasing was a luxury or a way to get into a more expensive car if you didn’t have the cash for it. Today, leasing has a new meaning: It’s simply a way to get into a new car at an affordable price — especially if you’re a college student strapped for cash or a young professional just starting out in your career. That’s probably why auto leasing has seen a nationwide increase of 125% since January 2013!
Leasing a car is considerably cheaper than buying one. Since you’ll never own it, all you finance is the depreciation for the term of the lease, not the entire purchase price. For example, if you leased a $30,000 car for 24 months, and it had an estimated value (by the bank/finance company) of $16,000 at the end of the lease, you would only finance the $14,000 in depreciation, plus interest and finance charges. The only caveat is, you can’t modify the vehicle in any way (wheels, stereos, etc.), as this will ultimately effect the vehicle’s resale value at the end of the lease.
During your lease, you’re limited to driving the vehicle a certain amount of miles per year because the mileage will ultimately help determine its value at the end of the lease. The up-side is, you can return the vehicle at the end of the lease, and get a new model. Or, you can buy the vehicle outright, by paying the remainder of the vehicle’s value. Plus, you don’t have to pay for repairs (and maintenance in most cases) during the lease term. Just gas it up and drive!
If you have a relatively short commute to school or work and, as a rule, don’t put a lot of mileage on your vehicle, leasing may be the solution for you. Add to that the lower monthly payment and the benefit of getting to drive a new vehicle, and you’ve got it made!
Looking for a lease? Click here for a list of participating dealers and search for your new vehicle today.
CUshine Contest Questions: If budget wasn’t an issue, what kind of car would you lease? Have you leased a car in the past? If so, how was your experience and would you lease again?
// Categories: Borrowing Wisely,Buying A Car,College Life
// Tags: buying car, car leasing, Leasing, vehicle leasing