Benefits of Leasing
Automobile leasing can be a very attractive alternative to buying for many people, although maybe not for everyone and is a respected financial concept that has long been used in the business world as a smart method of financing. You must decide about the importance of these benefits to you. So, what are the potential benefits of leasing when compared to conventional new-auto purchase loans?
- Lower Monthly Payments
Because you're only paying for the portion of the vehicle that you actually use, your monthly payments are 30%-60% lower than for a purchase loan of the same term.
- Provides an opportunity for better equipped vehicles, more often
Since your monthly payments are lower, you'll be able to get more truck for the same money and drive a brand new vehicle every two to four years, depending on the term length of your leases.
- Fewer Maintenance Headaches
Most people like to lease for a term length that coincides with the length, in months, of the manufacturer's warranty coverage so that if something major goes wrong with their vehicle, it's always covered.
- Low Initial Cash Outlay
Most leases require little or no down payment, which makes getting into a new vehicle more affordable and frees up your cash for other things. However, you can choose to make a down payment to lower your monthly payment amount.
- Lower Tax Bite
In Canada, you don't pay sales tax on the entire value of a vehicle when you lease. You're only taxed on the portion of the value that you use during your lease. The tax is spread out and paid along with your monthly lease payment.
- No Used-Auto Hassles
With leasing, the headaches of selling a used car are eliminated. When your lease ends, you simply turn it back to the leasing company and walk away, unless you decide to buy it or trade it.