The benefits of leasing a car, according to U.S. News & World Report, include affordability, an applicable manufacturer's warranty and convenience. Costs are generally lower, and most lease agreement warranties covers vehicle repairs during the first few years.
A new car can be leased for little or no down payment, according to Consumer Reports. A lessee makes payments for the depreciation of the vehicle during the leasing period, rather than paying full price or making loan payments. This allows a person to drive a vehicle that may otherwise be out of their price range. The lessee has the option of buying the vehicle after the leasing period ends, sometimes at a smaller price than if they had purchased the vehicle new, says U.S. News & World Report.
Leasing is favorable for people who are concerned with having the newest features and technology in their vehicle, notes Cars.com. A lessee is able to consistently drive a new or late-model vehicle if they choose to turn their vehicle in at the end of the lease period, then start another lease on a new vehicle. There is a smaller likelihood of a new or late-model vehicle needing repairs, compared to an older vehicle that was purchased outright.
People who are single, drive seldom, and have no pets or children get the greatest benefit from leasing, according to Consumer Reports. This is because the condition of the car must be maintained according to the lease terms, and families and pets can contribute significantly to a car's wear and tear.
Since most banks cap auto loans at a certain level, people seeking a particularly expensive car often choose to lease to avoid the costly down payment or payment outright, as reported by Investopedia. Business owners also enjoy advantages with leasing, provided that they use the vehicle exclusively for business purposes, according to Investopedia. This is because certain tax advantages apply to cars leased as a business expense.
While monthly payments can often be half of those of an auto loan, there are extra costs to leasing a car, according to Consumer Reports. Since a lease payment is lower than a loan payment and takes longer to pay off, the associated finance charge based on the car's value is always higher.