When you are financing a vehicle, you either purchase it outright or lease. Leasing a car, truck, van, or SUV has its advantages, and here are some ways it benefits you.
Leasing a vehicle typically means lower monthly costs because you do not pay based on the car’s actual value. You instead spend the depreciation that occurs during the term of your loan. From the beginning, you save money as well because your initial down payment is smaller than a car purchase signing.
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If the car you lease happens to be brand new, it has the latest innovations. Connective technology — like Android Auto™ and Apple CarPlay™ — or safety features — like adaptive cruise control, lane keep assist, or automatic emergency braking — ensures that you have a modern car with the up-to-date accessories for your daily commutes.
The majority of leases last two or three years. Unless you plan on driving many miles on your leased vehicle, it remains covered by the manufacturer’s warranty for the entire time you own it. This reduces anxiety about expensive repairs. Some warranties will cover regular maintenance when you service your car at a dealership. Warranty coverage decreases your total cost of ownership overall, compared to purchasing a vehicle.
Depending on where you live, you could find a significant savings in sales tax when you lease a vehicle. You sometimes have to pay tax on your deposit and your monthly payments. When you buy a car, you are charged sales tax on the whole purchase price, minus the value of your trade-in.