Why Do People Lease Vehicles?

When a consumer goes shopping for a new vehicle, she has two basic options to consider: to buy or to lease the new vehicle. While opinions vary on which is the best way to go, there are a number of reasons why a person might choose to lease a vehicle instead of buying one. By understanding the reasons, the consumer can decide for herself whether leasing is a good option for her life.

Driving a New Vehicle

Driving a new vehicle can be a statement of status for some people, while others simply feel safer driving in a new vehicle. Regardless of why a person wants to drive a new vehicle, if driving a new one is important, then leasing may be a good option to consider. A standard lease is for two years, meaning that someone who leases his vehicle will get to drive a new vehicle every two years when the old lease expires.

Less Money Down

Though some consumers buy new vehicles with no down payment or a small down payment, typically the down payment for a new vehicle purchase will be substantially more than a down payment for a lease. For a consumer looking for a new vehicle who does not have the amount of cash needed to make the required down payment, leasing may be an option to consider. Regardless of whether a consumer is buying or leasing a new vehicle, it is always important to investigate and understand all the fees and other costs associated with the transaction.

Lower Monthly Payment

In general, a new vehicle lease requires a lower monthly payment than purchasing a new vehicle. When purchasing a new vehicle, the consumer is making payments on the entire value of the vehicle. With a lease, the consumer is only covering the amount of depreciation that the vehicle experiences during the lease period. In both cases, there is also an additional charge to create a profit for the seller or owner of the vehicle.

Reduced Hassle

Another significant factor for many people in the decision to lease a new vehicle is the reduction in hassle. This is especially true at the end of the lease period. The consumer simply returns the vehicle and pays the fees stipulated in the lease contract. The consumer who purchases a vehicle must sell or trade in the vehicle when she wants to buy a new one. With either selling or trading, typically a lot of negotiation must take place and many consumers simply prefer to not have to deal with this.