9 Advantages to Leasing a Car

For most people, buying a car usually makes more financial sense than leasing, however - if a lease turns out to be right for you, then you should be aware of the advantages it offers versus buying a car.

1. Lower Monthly Payments

Leasing a car usually results in monthly payments that are 30% - 60% lower versus buying a car. This allows you to drive a car that you may not normally be able to afford, and this is perhaps the biggest advantage that leasing offers.

2. No Repair Costs, Low Maintenance

If you take my advice and only lease for 36 months or less, than you are typically covered by the manufacturer's bumper-to-bumper warranty during your entire lease. You will never have to worry about major repair costs, and in some cases manufacturers also offer free maintenance for the first couple of years.

3. No Hassles with Used Cars

When your lease is over, you simply return the car to the leasing company. No more hassles trying to sell a used car - and the value of the vehicle at the end of lease is not your problem. There are some cases where leasing companies overestimate the value of the car which results in a lower lease payment for you, and a loss for the leasing company.

4. Tax Benefits

If you intend to use the car for your business, you can typically write off the entire lease payment as a tax deduction. And even if you don't own a business, most states only tax you on the "usage" portion of your lease - meaning you don't have to pay taxes on the full price of the vehicle. This can save a few hundred dollars versus buying a car and paying taxes on the full amount.

5. Drive the Latest Cars

A lease allows you to drive a new car every 2 or 3 years, giving you the benefit of enjoying the latest technological advances and safety features.

6. More Choice of Vehicles

When you lease a car, you don't have to worry about its reliability or quality because you're only going to be driving it for 2 or 3 years. Most cars won't have any issues during this time and this allows you to choose cars that you may not necessarily buy.

7. Less Money Up front

Many cars can be leased with no money down (although there are always going to be some up front fees which can usually be rolled into the monthly payment). When you buy a car, you're usually required to put 20% down in order to get a decent car loan rate.

8. Includes GAP Coverage

Most leases include gap insurance for free which will protect you in case the car is totaled or stolen during the lease.

9. Good if You're Accident Prone

If you buy a car and wreck it, insurance will pay for the damages, but when it comes time to sell the car, you will take a hit due to "diminished value". People are not willing to pay the same price for a car that's been wrecked. With leasing, if you wreck the car, insurance will still take care of it, but the diminished value is the leasing company's problem, not yours.