Why to Lease a Car Instead of Buying

Why to lease a car instead of buying is a question with no absolute right or wrong answer. There are many advantages to leasing a car instead of buying one, including lower monthly payments and a shorter commitment period.

Lower Down Payments

Dealers often require lower down payments for leasing a car than they do for buying a car through financing, according to SmartMoney.com. In fact, some dealerships don't even require any down payment for leasing a car.

Lower Monthly Payments

Dealerships usually charge lower monthly payments for car leases than they do for financing. Lower monthly payments make it possible to afford a more expensive car which is one of the most attractive reasons for leasing a car.

Shorter Commitment

Car leases have a shorter commitment period than auto financing loans do. The majority of car leases last between two and three years while the average auto financing loan lasts five years, according to CNN Money.

Lower Sales Tax

Car leases have a lower sales tax than buying a car does which is another way car leases save you money. The sales tax on a car lease is usually half of what the sales tax is on buying a car.

Newer Car Flexibility

Leasing your cars instead of buying them makes it easier to get a new car every two or three years. If you purchase a car with a five year auto loan, you'll be stuck with an older model car after a few years. If you want a new car, you'll have to sell your older car before you get a new car. However, if you lease a car all you have to do is bring it back to the dealership, hand in your keys and sign the lease for a new car.

Try Before Owning

Most leases come with the option of buying out the lease after it's over. In other words, you can use the money you paid during the leasing period towards buying the car after the leasing period is up. The advantage of this is that you can try driving the car for two years before you make the decision to purchase it.