What Are the Advantages of Leasing a Car?
When it comes to auto financing, consumers typically fall within one of two categories--those who lease cars and those who take out a loan to buy them. Financing a vehicle is a great option if you want to own it someday and if you tend to take care of your cars so they last for many years. Leasing is a more attractive option for drivers who are rough on their vehicles. The advantages of leasing a car are much more than that, though.
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Vehicle Turnover
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One of the main advantages of leasing a car is that you can turn your vehicle in every couple years for a new one. Most leasing contracts only last for two or three years, although some newer ones are five years long. Either way, at the end of the contract, you are under no further obligation once you bring your leased vehicle back. You can either walk away or choose another car to lease for a few years.
New Cars
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Many people who enjoy leasing cars appreciate getting the latest comfort and safety features every couple years. With automakers constantly making improvements on their products, the car you have now could be outdated in two short years, as newer models have today's newest safety features and other options.
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Lower Payments
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When leasing a vehicle, the customer is not required to make as high of a down payment as they would if they were purchasing the vehicle. But the savings do not stop there. The monthly payments for a lease are usually much lower than monthly payments for financing a vehicle. This is because the customer is not responsible for the full price of the vehicle. Instead, you are mainly paying the finance charges and depreciation of the vehicle during the time you have it. In most cases, this is just a fraction of the cost of the purchase price.
Fewer Maintenance Costs
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Another one of the advantages of leasing a car is that any maintenance procedures that occur as a result of wear and tear or simple defects are covered under your warranty. You may even be able to purchase a prepaid plan that covers your scheduled maintenance procedures like oil changes, tune-ups and tire rotations.
Gap Protection
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When you finance a car to purchase it, you are usually required to purchase your own gap insurance coverage. With a lease, however, the gap coverage is often included in the price of the monthly payments. This covers you in case you get into an accident and the costs of repairs come out to more than you owe on the vehicle. Gap coverage also covers your vehicle if it is stolen, so you have minimal out-of-pocket expense.
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