2718: What are the Best Reasons to Lease A Car? by Vicki Cook and Amy Blacklock of Women Who Money

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[00:01:16] from Optimal Living Daily. This is Optimal Finance Daily, Episode 2718. What are the best

[00:01:24] reasons to lease a car? By Vicki Cook and Amy Blacklock of womenwhomoney.com. And I'm your

[00:01:31] host and personal finance enthusiast, Diana Merriam. Now let's get right into today's post

[00:01:37] and continue optimizing your life. What are the best reasons to lease a car? By Vicki Cook

[00:01:47] and Amy Blacklock of womenwhomoney.com. You've probably heard buying a car versus leasing one

[00:01:54] will save you money every time. And if you run the numbers, that might be true. But over the last few

[00:02:00] years, almost one third of all new car owners leased rather than bought. If it isn't about

[00:02:07] saving money, what are some of the reasons people choose to lease rather than buy when shopping for

[00:02:12] a new car? While the percentage of people leasing is expected to level out or decrease slightly,

[00:02:18] the leasing market is projected to stay strong in the near future. The profile of the consumer

[00:02:24] who leases has also changed over time. Luxury cars made up the majority of leases for decades.

[00:02:32] Now we see more leases on small SUVs, mainstream sedans, and even compact cars. And millennials

[00:02:39] lease more than any other age group as a proportion of their overall sales. What's interesting is many

[00:02:46] car shoppers have no intention of leasing a car when they head to the dealership. But once they

[00:02:51] look at the new cars they want, leases begin to look like a much better deal. In order to stick

[00:02:57] to a budget, a lease may be the only option that works if they have their heart set on driving a

[00:03:02] new car. Best Reasons to Lease a Car Let's review some of the benefits of leasing a car and the

[00:03:09] reasons why people lease new vehicles going against the traditional advice that leasing

[00:03:14] isn't a very smart financial decision. 1. Lower Monthly Payments

[00:03:21] As much as people want to drive new cars, they often face severe sticker shock.

[00:03:26] Many soon realize buying their dream car is just that, a dream. Sky-high monthly payments

[00:03:32] send car shoppers looking for lower cost options. This means keeping their current vehicle,

[00:03:38] choosing a lesser new car, buying used, or leasing. Leases are an attractive option because payments

[00:03:45] average over $100 less per month than finance payments on a new car purchase. This is because

[00:03:51] lease payments only cover the depreciation of the car rather than the whole cost of the vehicle.

[00:03:57] Depending on the contract, lease payments also include interest, taxes, and fees. If your budget

[00:04:03] can't support buying your dream car and you aren't willing to scale back or buy used, leasing may be

[00:04:09] a better option than purchasing and taking on a car payment you can't afford. 2. Lower Down Payments

[00:04:17] Most lease agreements still require a down payment of a few thousand dollars. Some dealers may waive

[00:04:23] the down payment depending on the chosen vehicle and the length of the contract. Sales tax due on

[00:04:29] a lease is usually less than on a new car purchase too. Tax may only be calculated on your monthly

[00:04:34] payment and not on the total cost of the car. 3. Unfavorable Terms on Used Car Loans

[00:04:42] When a person plans to buy a used car, they need to remember lenders generally offer shorter terms

[00:04:48] and higher interest rates than they offer for new car purchases. This impacts monthly payments too.

[00:04:55] Used car shoppers might look for or be shown brand new under-warranty cars which can be leased for

[00:05:01] much less than the payments on the used car. This can shift their thinking towards leasing,

[00:05:06] even when they were sure a pre-owned vehicle is what they wanted.

[00:05:09] 4. Reduced Maintenance and Repair Costs One of the biggest excuses people make for

[00:05:16] not buying used cars is the cost of maintenance and repairs. Since a vehicle lease is usually

[00:05:21] for 3 years, it's always under warranty, so significant repairs and costly maintenance

[00:05:26] is generally avoided. Some lease agreements even include the performance of routine maintenance.

[00:05:32] For women who feel females often get taken advantage of by repair shops,

[00:05:37] this is a significant benefit and leasing often makes more sense than buying used.

[00:05:43] 5. Safety, Prestige, and Pleasure If you were considering buying a used car,

[00:05:50] leasing gives you some of the same benefits as buying new but at a lower cost. Your leased

[00:05:55] car will have the latest safety and technology features, very important for keeping your family

[00:06:00] safe. And if driving a new car matters for your business or even for personal enjoyment,

[00:06:06] leasing makes more sense than buying used. Are they good enough reasons to lease?

[00:06:12] Should you buy or lease a car? Only you can make that decision, but keep in mind many people will

[00:06:19] still tell you it's better to buy even if you think you have good reasons to lease. Try to

[00:06:24] be objective when you make your decision and weigh all the pros and cons of leasing a vehicle.

[00:06:30] Whatever you do, remember you're taking on a monthly payment commitment. You'll want to keep

[00:06:34] your inner dreamer in check while deciding on a vehicle and whether new, used or leasing makes

[00:06:40] the most sense to help you meet your financial goals. You just listened to the post titled,

[00:06:49] What are the best reasons to lease a car? by Vicki Cook and Amy Blacklock of womenwhomoney.com

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[00:08:41] slash advantage. USPS Ground Advantage. Simple, affordable, reliable. Leasing a car can appear

[00:08:51] attractive due to lower monthly payments and the allure of driving a new vehicle every few years.

[00:08:57] However, it often proves to be a less financially sound decision compared to buying a car outright.

[00:09:03] One of the primary drawbacks of leasing is that you don't own the car. At the end of the lease

[00:09:09] term, you must return the car, leaving you nothing to show for the money you've invested.

[00:09:14] Leasing contracts also come with strict mileage limits, typically around 12,000 to 15,000 miles

[00:09:20] per year. Exceeding these limits incurs hefty penalties, which can significantly inflate the

[00:09:26] overall cost of leasing. Finally, leasing often entails higher insurance premiums and maintenance

[00:09:33] costs. Lease agreements typically require comprehensive insurance coverage, which can

[00:09:38] be more expensive than basic coverage for owned vehicles. And you're responsible for maintaining

[00:09:43] the car in pristine condition to avoid penalties for excessive wear and tear. In essence, while

[00:09:50] leasing may seem financially appealing in the short term, it often leads to higher overall

[00:09:56] expenses and offers no long-term benefits compared to purchasing a car outright.

[00:10:02] And that should do it for today. Have a happy rest of your day, and I'll see you tomorrow as

[00:10:06] usual, where your optimal life awaits.