Leasing is growing in popularity, with many people opting for leasing rather than outright purchase of their new vehicle. But one of the main questions when it comes to leasing, is why lease? To answer that, first the term ‘lease’ needs to be understood. A lease is, to put it simply, a long-term rental agreement for a fixed monthly price.
Quite often, whether to lease or not depends on the individual, as leasing isn’t for everyone. Leasing can however be particularly beneficial to businesses, as they can write a lease off as a business expense. Leases often come with mileage limitations, so if you’re mileage is high, then a lease may not be for you.
Leasing does however have many benefits, the first and often most influential of these is that once the lease is up, the vehicle can be handed back over and the responsibility for selling the car and dealing with the depreciation falls to the lease company. It is estimated that most new cars now will lose more than half their initial value after the first 3 years.
Dependant on the type of person you are and whether being seen in a new car is important to you, leasing has the perks of always driving around a new car. This isn’t just for those that are image conscious, having a newer car means that it’s unlikely to need anything more than routine maintenance, as the car is normally returned before it gets to an age where problems start to arise.
Further to this, not only is the car always new, but many people lease vehicles that they’d never otherwise be able to buy, even if this doesn’t necessarily save money. Getting a better equipped, more lavish and larger vehicle is appealing to most people, and around 75% of luxury cars are leased.
With all that in mind, it can still be a tough decision to make, and ultimately, it tends to come down to the cost. Often this is something that needs to be worked out on an individual basis – looking at the monthly payments, the down payment, and the estimated value of the car at the end of the lease. But there is no doubt that leasing will only increase in popularity over the coming years.
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