Vehicle leasing has become an increasingly popular option for those looking for a new car. While buying a vehicle outright has been the traditional route for many, leasing offers an alternative with its own set of advantages and disadvantages. Let’s find out if vehicle leasing is worth it for you by exploring the pros and cons and the best types of vehicles, driving styles, and lifestyles for leasing!
The Pros of Vehicle Leasing
Lower Monthly Payments:
One of the most appealing aspects of leasing is that monthly payments are typically lower compared to purchasing a vehicle. This is because you’re essentially paying for the depreciation of the car during the lease term, rather than the entire cost of the vehicle. This is great for those with a tighter budget.
Access to Newer Models:
Leasing allows you to drive a brand-new car every 2 to 4 years, keeping you up to date with the latest technology, safety features, and styling. This is beneficial if you like having a new and reliable vehicle.
Minimal Maintenance Costs:
Leased vehicles are usually under warranty for the duration of the lease, meaning you won’t have to worry about expensive repair bills. Additionally, since leased cars are typically new, they are less likely to encounter mechanical issues or need repairs.
Flexibility:
Leasing offers flexibility at the end of the lease term. You can choose to return the vehicle, lease a new one, purchase the leased vehicle at a predetermined price, or extend your lease.
Read more: How to Lease a Vehicle in 5 Steps
The Cons of Vehicle Leasing
Mileage Restrictions:
Most lease agreements come with annual mileage limits that range from 10,000 to 15,000 miles or 12,000 to 24,000 kilometres per year and exceeding these limits can result in extra fees. If you have a long commute or frequently take road trips, leasing might not be the best option for you.
No Ownership:
Unlike buying a car, leasing means you don’t own the vehicle at the end of the term. You’re essentially renting it for a set period, and then returning it unless you choose to buy the vehicle at the end of the lease or extend your lease.
Potential Additional Fees:
Lease agreements often come with some potential fees for exceeding the mileage limit and for excess wear and tear on the vehicle. To avoid extra fees, we recommend following the mileage limits and taking care of the vehicle to keep it in good shape!
Limited Customization:
Lease agreements typically require you to return the vehicle in its original condition, meaning you can’t make significant modifications or alterations to personalize the car. This is because the vehicle may be sold to someone else after the lease.
Best Types of Vehicles, Lifestyle, and Driving Styles for Leased Vehicles
Compact Cars and Sedans:
Compact cars and sedans are often popular choices for leasing due to their lower monthly payments and higher fuel efficiency. When deciding on a brand or vehicle year, it depends on your budget and preferences. Leasing a newer vehicle gives you access to newer features and longer warranties, whereas leasing older vehicles offers a lower monthly payment but potentially greater maintenance costs because of a shorter warranty.
City Living:
If you live in a city where parking space is limited, public transportation is readily available, and you travel shorter distances, leasing a vehicle might be a more practical option than buying.
Moderate Mileage Drivers:
If you don’t anticipate exceeding the mileage limits set by the lease agreement, leasing can be a suitable choice.
Budget-Conscious Individuals:
Those who prioritize lower monthly payments and minimal maintenance costs may find leasing a cost-effective option, especially if you prefer to allocate your budget towards other expenses or investments.
Flexible Lifestyles:
Individuals with flexible lifestyles or uncertain future plans may find leasing beneficial because it offers options to either return the vehicle or purchase it at a predetermined price at the end of the lease term.
Vehicle Enthusiasts:
Leasing allows you to drive the latest models with advanced technology features, making it ideal for those who prioritize staying current with automotive advancements and having a new vehicle.
Business Professionals:
Professionals who rely on having a reliable and presentable vehicle for work purposes, such as sales representatives or consultants, may benefit from leasing due to the lower upfront costs and predictable monthly payments.
Whether vehicle leasing is worth it depends on your individual preferences, lifestyle, and driving habits. If you fall into one of the categories we listed above, leasing a vehicle may be worth it for you! Before deciding, carefully weigh the pros and cons to determine if leasing aligns with your needs and financial situation. Birchwood can help you get started on your lease today!
