According to a 2016 survey, Americans are leasing more new cars than ever before, leased luxury cars being particularly popular. It’s curious because we are told that buying a house is better than renting. So why wouldn’t the same be true when it comes to cars?
As much as there are certain arguments to be made in favor of purchasing a vehicle outright, there are just as many reasons to consider leasing. If you work the numbers right, you will come to know that leased luxury cars may be the smarter way to drive a swanky new vehicle.
This advice isn’t just for luxury car enthusiasts — leasing makes sense even if you are in the market for a more practical option thanks to leasing swapping websites.
Read on to find why many choose to lease, rather than purchase luxury cars:
1. Drive a Luxury Car and Pay for the Depreciation Only
Do you know why buying a luxury car is a bad idea? For starters, you will have to take the massive hit of depreciation. In contrast, leasing gives you the power to drive a luxury car and pay for the depreciation only. When you drive a leased luxury cars, your payment is calculated by determining the difference between the residual value and the sale price.
Of course, at the end of the contract, you have to return the car and you will have nothing to show against your disbursements, but this is a problem if you care about ownership. Just be sure to budget a monthly cost of your car expense and you can drive your favorite luxury vehicles.
2. Save Big and Pick Out a New Car After Every Two Years
The average car lease period is three years, so you can pick out a new vehicle as soon as your lease is up. Or you can exit the car lease early by conveniently transferring it to someone else via lease swapping websites like QuitALease without affecting your credit score.
In any case, you don’t want to be stuck with same make or model of a car for the rest of your life. Leasing is a great option for you to drive a leased luxury cars without engaging in long-term commitments. People who like to experience driving a variety of cars should also take advantage of leasing.
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Leasing doesn’t just allow you to evade long-term commitments, it also enables you to save a portion or all of your monthly payments as a tax deduction. However, it depends on your situation, so be sure to consult a specialized tax accountant to assess your situation. Some companies even offer a ‘car stipend’ to their employees.
3. Why Own a Normal Cars When You Can Drive a leased Luxury Cars?
Why should you make the payments on a Honda Accord Sedan when you can drive a BMW 3-series for less? A brand new Accord Sedan will cost you $23,570. On the other hand, a nicely equipped BMW M3 sedan that is down financed at 3.89% for a contract up to 60 months can be yours for a monthly installment of $1,221.40. And if you opt for leasing, the new 2018 BMW 3-series will cost you only $839 a month for the next 36 months.
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Now if your monthly budget supports that $1,221.40 a month payment, you will be able to pocket a savings of $4,588.8 over the first 12 months. At the end of the lease contract, you can use the savings for the next down payment and keep the rest for whatever you like. Financing will allow you to own the Accord, but ask yourself: what would you rather be driving?
In case you are looking for a more affordable solution, then you can always consider car lease takeover. QuitALease and other online marketplaces will come in handy in this regard.
4. With Leasing, Forget Maintenance and Repair
A high percentage of people do not want to be making repair and car payments at the same time. When you opt for a lease, your vehicle is under the factory warranty coverage. This means you do not have to worry about repairs costs. Some renowned car makers like BMW even cover things like brakes and oil changes during the first four years.
With six to eight years car financing gaining in popularity, these people are running the risk of exhausting their cash when actual issues arise other than paying their monthly bill. Many of these folks who have opted for financing would have been better off leasing two or even three luxury cars within the same period for less money.