Who Is A Good Candidate For Leasing A Car?
People often claim that nobody should lease a car. They argue that leasing is always a bad deal because you don’t end up owning the vehicle. That’s an oversimplification of the issue. In fact, many people are actually good candidates for a lease contract. Even though leasing isn’t the most frugal way to “own” a car, it can make sense for certain types of drivers. Below, I’ll explain who might be better off leasing a car rather than buying a new or used car.
Candidate #1: Likes New Cars
This is the primary reason why most people enjoy leasing: they enjoy driving newer cars. Some drivers grow tired of their vehicles quickly. After 2 or 3 years, they prefer to trade them in for a new model. Leasing a car makes this process very easy. The dealership can quickly transfer the lease from the old vehicle to the new. A related benefit from the lessee’s perspective is that they won’t have to deal with the effort of selling a used car later.
Candidate #2: Enjoys Low Maintenance
When you own a car and something goes wrong, you’re forced to pay for replacement car parts and repairs. By contrast, most lease agreements coincide with a car manufacturer’s warranty. If the transmission fails, the engine gives out, or the timing belt breaks, everything is covered. For the lessee, that translates into very little maintenance, regardless of how the car performs. If it doesn’t start, the lessee can simply have it towed to the dealership, confident that solving the problem won’t cost any money.
Candidate #3: Wants More Car
While nobody enjoys making car payments, most people accept them as a necessary evil if they want to drive. There’s a disparity between the monthly payments required to service a car loan and those needed to carry a leasing agreement (for the same make and model). In essence, the car loan is always saddled with higher payments. That’s why you’ll often hear people say that a lease gives you “more car for the dollar.” Of course, that fails to address the issue of ownership, but for the lessee, the lower payment is attractive.
Should You Lease A Car?
Having said everything above, most people are far better served by purchasing a new or used car rather than leasing. Even when things go wrong with a car that you own (and they always do eventually), paying the costs associated with repairs and car parts is still a better option financially. You’ll need to determine what is most important to you. Keep in mind that very few people make great candidates for a car lease. Plus, there are always fantastic deals in the used car market.
