Pros and cons of leasing: What works best for your car buying budget? Americans are in a spending mood, and they’re buying and leasing new cars in increasing numbers. The recession is over, unemployment is falling, and pros and cons of buying into a business debt levels have dropped in recent years.
According to IHS Automotive, an auto industry research firm, the cars, trucks, and SUVs rolling down U. This, perhaps more than anything, is driving people to get into new sets of wheels, and they’re increasingly choosing a lease instead of a purchase. In fact, leasing now accounts for more than 25-percent of new vehicle sales. GET MORE TIPS IN OUR COMPLETE CAR BUYING GUIDE HERE. Leasing is appealing in many ways, but there are pitfalls to entering into what is essentially a rental contract. Before you fall in love with a new car and start signing on the dotted line, be sure you understand all there is to know about the pros and cons of leasing.
Compare the monthly payment for a typical lease to the monthly payment for a typical loan, and it doesn’t take a doctorate degree in financial wizardry to see that you can get the same car for less money by choosing the lease, because lease payments are usually lower than loan payments. Alternatively, if you’ve set aside a specific amount of money in your monthly budget to put toward a car payment, you can drive a more expensive vehicle when you lease a car compared to when you finance a loan to buy a car. When you lease, a 3-year contract is typical. That means you get a new car every 36 months, one equipped with the latest safety and infotainment technologies, a new-car warranty, and maybe even free scheduled maintenance. Aside from regular oil changes and tire rotations, you shouldn’t incur any additional expenses aside from the monthly payment. And if you happen to choose a car you don’t like much, you won’t need to wait very long to get rid of it.