The mantra of many so-called financial experts for years has been that it doesn't make financial sense to lease a vehicle at any time.
While we can safely assume that these individuals have good intentions with the messages they put out into the world, their words are not necessarily true in all circumstances, and it is important that we examine the times when leasing a car might make financial sense.
Car Owners Often Owe More Than Their Car Is Worth
Adding a lot of miles to one's vehicle is a quick way to tear down the value of that vehicle. As soon as a car is purchased and miles are added to it, it started to drop in value rapidly. When one is driving their car every day and putting a lot of wear and tear on it, they are making a bet that they are sure to lose.
That is to say that they will likely end up owing more on their vehicle than what they could sell it for. This reality means that leasing a car can make a lot of sense for those who don't want to give up that much value.
Lease Payments Can Be Lower Than Car Payments
Why would you bother spending your hard-earned money on car payments that are higher than what you might pay on a lease? This is the predicament that many have found themselves in as well. It turns out that simply leasing a vehicle may result in a lower car payment than what one has to make as their monthly payment on their vehicle overall. Moneyunder30.com explains how and when this can make logical sense:
Even apart from luxury vehicles, there may be certain situations in which the monthly payment on a lease will be lower than what it will be for a purchase. In this situation, leasing can make more sense. Exactly how much sense it will make, however, will depend upon the amount of cash required up front.
Given this dynamic, many choose to simply lease their vehicle rather than purchase one outright. After all, an outright purchase of a vehicle puts a lot of strain on the budget and often requires a hefty down payment. Many would rather skip all of that and move on to the part where they are able to drive around in the vehicle of their choice without the headaches associated with an outright car purchase.
It Is Fun To Try A New Car Every Few Years
Those who purchase a vehicle are unlikely to be able to afford to purchase a new vehicle every few years (with few exceptions), but those who lease a vehicle can often find themselves behind the wheel of a new car in a short period of time like this.
That is because leasing is a lot more flexible in terms of what a person can expect to obtain over time. They can choose to trade up to something a little fancier if they want to once they have made a certain number of lease payments. Those who lease get to enjoy the latest model vehicles as they come out on a frequent basis.
You Will Have Invested less In An Asset That Drops In Value
It is generally a good idea to only invest in assets that rise in value. Unfortunately, that is not the case with vehicles (with the exception of rare antique vehicles that are not used for regular transportation).
Therefore, it doesn't make a lot of sense to many people to purchase a vehicle outright and have so much of their money tied into something that is dropping in value when they can simply choose to lease a vehicle instead. They get to use the vehicle for their regular transportation needs either way, so why not leave the burden of the investment on someone else's shoulders instead?
While some may still insist that leasing a vehicle never makes sense, you really have to think about it from the perspective of what makes logical sense for your life in particular. Those who claim to know the right financial moves for everyone simply don't.
They haven't had the opportunity to look at your financial situation under a microscope, and they therefore simply don't know what they are talking about in your case. They may have good intentions, but only you know what is best for you and your life. If you would like more information about leasing a vehicle, please contact us for the latest details.