Should You Lease or Buy a Car?

The benefits of leasing as opposed to buying a car was evident to me when our old car suddenly needed a new transmission and we were not in the best of financial positions. Despite aggressive low-interest financing, cash-back offers and other incentives offered by our local dealers, leasing numbers keep increasing over the years due to the great benefits. Leasing is not only an attractive financial proposition to most auto-consumers, but has become a lifestyle choice for many.

Keeping up with the latest trends

Often times leasing is of a personal and lifestyle choice rather than a financial one. Some are not comfortable with the idea of owning a vehicle over a long period of time. They would rather keep and drive the latest models every two to three years.

Leasing an auto gives you the convenience of having the latest technology as well as safety trends such as an electronic stability system, DVD entertainment systems and certainly advanced stereo equipment. If you are willing to forego ownership for your wheels, then leasing is your best option.

Purchasing Flexibility

Leasing also offers purchasing flexibility because it allows you to defer the buying position while using the car. You don’t have to haggle with your mechanic over repair expenses, deal with hefty maintenance bills or worry about a depreciating asset. Provided you can keep the vehicle in good condition and stay within the contracted mileage allowance, you are effectively getting a test drive for a long, long time. At the end of your lease, you can either purchase it or simply turn in the keys and walk away. No questions asked.

Cash Flow

Let’s not forget leasing offers many short-term benefits. It reduces your initial cash outlay as you do not have to pay the large down payment required for ownership. You only pay for the depreciation on the car – only the part you will use during your lease and not the entire vehicle. This results in lower monthly payments and frees even more cash in your account. This can be put to use more intelligently elsewhere than the questionable investment of owning a depreciating asset. If you are self-employed or use your car for your job, then you can write off your leasing payment as a business expense. Good deal.

Negotiating Leverage

Although it may seem a little unorthodox in this industry, almost everything about leasing is negotiable. If you know all the fees involved, try lowering your monthly payments. Negotiate the purchase price of the car at the end of the lease and contract additional miles on top of your mileage limit. You can also shop around and compare deals from different auto-insurers to get the cheapest GAP insurance for your lease.

All in all – it’s hard to argue these benefits when the economy is less than desirable.

Esther Smith

Smith has leased an auto in the past and enjoyed the feeling of no repairs or oil change charges. Contact info on her website here == http://www.cleancashflow.com