When Do Vehicle Leases Make Sense

October 5, 2011 · Posted in Finance, Leasing 

When it comes time to get a new car, is it better to buy or to check out vehicle leases? Actually there is no simple answer to the question. It depends on your particular situation at the time.

Leasing a car makes sense if a person prefers to drive only late models and does not mind paying a premium for the privilege. Some people feel more secure in a newer auto, believing there will be fewer mechanical failures. Others have an image to present to the world, of material success and whatever else a car might signify.

Just like when renting a house, there is no ownership involved in car rental. All monies spent are just for the use of the car, as well as for maintenance and insurance. At the end of the term of the agreement, the car is returned to the dealer unless the lessor decides to buy it at its resale value.

Why pay for a car you will never own, unless you exercise the buy-out option at the end of the lease? Well, for many, there is no good reason. Private individuals who do not want a new car every two to three years do better to buy. Those who take good care of their new or used automobiles can keep them for two or three hundred thousand miles. The total cost of reliable transportation will be less with long-term ownership.

However, for businesses it may be different. The cost of auto leases is a tax deductible expense. Many fleet cars and trucks need to be late models – to present an up-to-date appearance to customers – and are driven by employees who may be less careful of company cars than their own wheels. Turning the cars in every few years is often seen as a necessity for modern companies.

You must weigh the pros and cons of car leasing for yourself when deciding if this method of procuring transportation will be good for you.

You can find details about the pros and cons of car leasing and information about the best van leasing company, now.


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