Did you know that roughly 4.3 million car leasing agreements ended in 2019?
Most of these leasing agreements aren’t related to businesses, and a lot of them involve family cars, such as Toyota Camry’s. In fact, you might know someone that is leasing a car, but you might not understand why leasing is so popular.
This post will teach you the basics in terms of what to know about leasing a car. By the time you finish this post, you should understand why leasing is such a popular option.
What Does It Mean to Lease a Car?
At the most basic level, leasing a car involves making monthly payments on a car, rather than paying for it outright.
However, it’s worth noting that leasing isn’t like taking out a loan, wherein you make monthly payments and eventually own a car.
Rather, leasing often involves paying for the depreciation of a car, and after a certain amount of time, you give the car back. For example, if you lease a $30,000 car, you might only make $15,000 in payments, and then you might give the car back and lease another car.
If you purchased the car, then you’d have to pay the entire $30,000 and maybe some interest on top of that. Plus, at the end of the payments, you’d actually own the car.
What Are the Benefits of Leasing a Car?
Leasing companies tend to provide their clients with new or near new cars.
It’s because of this that leasing a car is often a great approach for anyone that wants to drive a car that’s in great condition.
It’s also worth noting that monthly payments associated with a leasing agreement tend to be lower than what you’d deal with if you bought the same car.
This can be helpful if you don’t earn a lot of money, but you want to get a new car.
What Are the Downsides of Leasing a Car?
One of the bad things about leasing a car is that you don’t build up any equity.
The money you pay into the lease is covering the depreciation of the car, and you don’t get any of this money back when the leasing agreement ends.
Yet, if you financed a car from a dealership, such as Monster Cars, you’d get a percentage of your money back when you finally sell your vehicle.
Leasing a car can also come with restrictive leasing agreements.
For instance, the leasing company might state that you need to limit your mileage. They might also stipulate that you can’t make any changes to the car.
What to Know About Leasing a Car
A lot of people dream about getting a new car, but they don’t know how they’re going to pay for the actual purchase. That said, with the help of leasing, many of these people can drive the car of their dreams, without having to break the bank.
We hope this guide to what to know about leasing a car was helpful to you.
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