When Does it Make Sense to Lease?
The world of car financing can be tricky to navigate, and while buying a car may be popular, it’s not the best option for every driver. So, when does it make sense to lease instead of buying? Leasing is perfect for times when you need the flexibility of a shorter time commitment. Rather than committing to a contract that could last years and years, a lease typically covers a three-year span of time. Here are a few scenarios where leasing might be the better choice:
If you’re starting a business and you need a vehicle, leasing is the way to go. Between leasing vs. buying, leasing is far easier to manage from an accounting perspective. You can deduct the lease payment amount directly, instead of juggling the calculations between the monthly payment and interest fees and depreciation. And speaking of depreciation, buying a new car always has the risk of steep depreciation. Leasing is a different type of arrangement, which means there is no depreciation recapture – so you avoid that tax liability completely.
Do you dream of driving a luxury car down the roads of Gurnee and Arlington Heights? You’re not alone! The demand for luxury vehicles is high, and the prices can be even higher. But when you lease a car, you can often get a much better deal. That’s because luxury cars have a higher residual value, so the dealership doesn’t have to worry about losing tons of money on a brand new car. That means a sweeter deal for you! Additionally, you can keep trying out the latest and greatest models when your contract runs out. It’s a win-win situation.
Sometimes you find yourself in a new home for just a short period of time. Whether you’re relocating for work or school, buying a car in a brand new location isn’t always worth the time and effort. A car lease is a perfect solution for those situations. You can lease a vehicle for the few years that you need it, and then return it to the dealership at the end of your term. No need to stress over reselling a car that you’ve only owned for a few years.
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