Car Leasing: A Rising Trend in Car Ownership
In the course of a person’s lifetime, they will need to make significant financial decisions. A specific example is buying a car. Unfortunately, a car is a rapidly depreciating item. That is why more and more people today are looking for an alternative to conventional car purchases and loans. One such alternative is car leasing.
Car leasing statistics
Many consumers are hesitant to try car leasing, mainly because the process is significantly different from buying a car. Nonetheless, leasing is considered one of the fastest-growing modes of car ownership. The most recent data in the US concludes that at least 31% of car sales were in fact, leases.
Apart from attractive offers and the opportunity to get a 0 down lease deal from select companies, leasing also appeals to a particular demographic. Younger buyers are more likely to lease a car because it gives them access to luxury models at a fraction of the cost. The short-term commitment also means you have more control over your cash flow.
photo/ Jan-Marco Gessinger
Why is now the best time to consider leasing a car?
Car manufacturers and dealerships are always looking for ways to push higher sales numbers. It turns out that with the popularity of car leasing on the rise, now is the best time to roll out excellent offers including the option of a zero down lease deal to entice consumers. What this means for consumers is that there will be no shortage of great lease deals from leasing companies.
It is a win-win situation because car leasing is a trend that will not fade away in the coming years. As the rising generation becomes more hesitant to purchase cars, car manufacturers and leasing companies will need to cater to the ongoing demand for leasing.
A simple guide to how car leasing works
The concept of car leasing is simple. But understanding the terms is what confuses some people. In general, you pay a lower monthly amortization because the calculation is only based on the car’s depreciation value throughout the life of the lease.
Like any financing model, leasing a car does involve specific commitments. What’s great about it is that the cost of the vehicle is predetermined at the beginning of the lease agreement, which means your payments are fixed regardless of market fluctuations.
Offers are also structured differently from one leasing company to another. If you are negotiating a no money down car lease, for example, you may be given the option to roll the first monthly payment throughout the lease term. Another option is to have all fees rolled over throughout the lease term. These options may give you more flexibility with your cash flow, but note that you are also paying additional interest.
Leasing does give you access to a new car every few years, and car maintenance is often included in the manufacturer’s warranty. If you do not mind giving back the vehicle to the dealership at the end of the lease, then this option works for you. However, there are strict limitations, especially with mileage, and you need to take extra care of the vehicle; otherwise, you may be charged additional fees.
Other sources: https://www.car-buying-strategies.com/New-Car-Lease-Guide.html
Author: Oliver Samson
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