So who should lease a car? Is it for you? If you understand the advantages and benefits of leasing, and it fits your personal situation, then leasing may be for you.
You don’t want ownership or stress over the depreciating value of a car, you want an option to get out early (via a lease transfer), you want lower monthly payments, but a more expensive car, you can afford the monthly payments over the set term, etc. If this describes your needs for financing a car, then leasing may just be for you.
Who are the real winners?
Individuals who find leasing is for them, find the biggest bang for the buck, is in short term leasing. Short term leasing is simply taking over an auto lease for the remainder of the lease agreement, thus the shorter period of time of the full lease agreement.
For example, Steve leases a new BMW over 5 years and places a $5,000 deposit. After the 2nd year he realizes he needs to save more money for that new home, or new baby, or he’s going back to school. Whatever the reason, Steve needs to end his lease. Lisa finds out Steve has this need and arranges with Steve to transfer his BMW lease to her. Lisa takes over all the financial obligations of the lease payments, and is commited legally to return the lease at the end of the lease term. Steve is now free from his lease obligations and any further payments.
However Lisa gained from this deal. Not only is she now in a short term lease for the remaining 3 years for this luxury vehicle, her monthly payments are less then if she leased a new vehicle becomes she’s benefiting from Steve’s $5,000 down payment. And, Steve become desperate to get rid of the lease, that he offered Lisa 1 month of lease payments to take the car lease off his hands. Lisa is now in a short term lease.
It costs the consumer less money in the short term than buying a new vehicle, or leasing a new vehicle. So are you the leasing type?
Next: How leasing a car works