Car leasing is a mechanism that has evolved quite a bit since it first became a popular option for people seeking new cars, and so, in that process, has become an option of greater interest for many folks. That said, it’s important to note that many of the core components of leasing remain intact, so your evaluation of whether or not leasing is right for you may well rely on the same considerations that have long been in place. Ultimately, the decision whether to buy or lease is not unlike the decision whether to purchase or rent a place to live; that is, it’s not that one or the other is always good or bad, but, rather, it’s a case of appropriately considering and recognizing your own personal circumstances, and so the matter of what’s best for you is largely contingent on how well you understand those.
For one thing, leasing is a great option for people who like moving in and out of cars over the course of just a few years. With average car loan terms now just over five years, and average lease periods right at about three years, leasing affords the “high-turnover car guy (or gal)” greater financial freedom to make a move. This means that if you are the other kind of car owner, the kind who is happy driving a vehicle until the wheels fall off, then buying is unquestionably the best option for you.
Something else to consider is the number of miles you drive each year. Leasing tends to become costly when you go much over 15,000 miles in a year, because mileage premium charges will kick in to the tune of around 25 cents per mile over the annual limit. This means that if you do a lot of driving, say, an average of 70 to 100 miles per day, then leasing will be a wallet-killer and something to be avoided.
The centerpiece of the leasing advantage is in knowing that you’re a person who likes being in a different car every few years and who drives a relatively modest number of miles. If that’s you, you’re a great candidate for a lease. Something else to remember – because those who lease turn vehicles over so frequently, they have far fewer car repair bills; new car warranties are now of such a quality and length that by the time they expire, you’re already moving on to the next car.
James L. Paris