Sunday 24th of January 2021

Which is Best: Auto Loan or Auto Lease?

Vehicle leasing has become more popular than ever, particularly in recent years. For those who use their vehicle mostly for business, leasing can bring greater tax benefits to them than they would receive through purchasing a vehicle, including deducting the lease payments themselves, as well as fuel costs, maintenance, and insurance payments.

You don’t need a down payment in order to lease a vehicle, and a security deposit usually is not necessary. Typically, when you lease, you will pay the first payment, license, and registration fees, and you are free to drive off in the vehicle. Plus monthly payments are usually lower than the payments would be on a loan for the same vehicle.

If you’re one of those people who trade in their cars every few years anyway, leasing may be of greater benefit for you. At the end of your auto lease term, which is usually three years, you just turn in the car and you can get another one under a new arrangement, or if you’ve decided you would prefer to buy a car, you are free to do so.

If you’re a realtor or the type of business person who drives others around in your vehicle as part of your business dealings, the type of car you drive could have an impact on how well you do in your career. With an auto lease, you may be able to afford a better vehicle than you could if you were attempting to buy one.

One of the downsides of leasing, however, is that you will have permanent monthly payments – there will never be a time that your vehicle is fully “paid off.” And if you decide you really love the automobile you’re driving, you will have to get used to the fact that you will have to return it at the end of the lease term. Another disadvantage is that your mileage is limited, usually to a base of around 12,000 to 15,000.

One of the advantages of purchasing your car is that, at the end of three years, you will still have a vehicle to drive without having to start all over with a new lease or financing. Plus, you can drive as much as you want, without having to worry about excess mileage charges. And leased vehicles may cost you more money to insure than a car that you purchase for yourself.

Whether you’re thinking of leasing or buying your next car, we can help you get online quotes to meet your needs.