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Is leasing a car better to older motorists? The Benefits of Leasing the Vehicle In this video series, you will learn about leasing is a Vehicle
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5 minutes read. Published March 03, 2023
Authored by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers with the details of using loans to buy the car they want.
The edit was done by Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to manage their finances through providing concise, well-researched, and clear information that breaks down otherwise complex topics into manageable bites.
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The idea of leasing a car might not be the top choice for someone over 50, but it can be a better option than buying a new car for certain. People with fixed incomes and who wish to own a brand new car with the latest security features every few years or want less of a term commitment to their vehicle might benefit from leasing rather than the long-term commitment of purchasing. Six advantages of leasing are several benefits that older individuals should take into consideration when deciding if leasing a vehicle is the best option for them. 1. A lower monthly payment car typically means a lower monthly payment and lower upfront costs than buying a vehicle. The monthly payments are lower due to the fact that when you lease, you’re only paying a portion of the cost of the car. “Although the price difference between leasing to buying has decreased during the past few years…the monthly payment should be less expensive than buying a car,” states Ronald Montoya, senior consumer advice editor for Edmunds. The overall cost of ownership during the lease could be lower because of the vehicle being covered by factory warranty. Essentially, the primary costs that an older person must be thinking about when leasing a car include whether the lease’s cost is affordable, the gas costs and the expenses related to . The monthly average lease payment is $578 . Although the monthly payment may be less, unless you opt to buy the car at the expiration of the lease and there are always vehicle payments for those who continue to switch from one lease to the next. This is a challenge for individuals who no longer have a regular paycheck coming in. When planning a budget for a lease, keep in mind that while monthly payments may be less expensive, lease agreements include extra costs, like costs for exceeding mileage limits and this can be an issue if you are planning to do a lot deal of traveling or road tripping. 2. Option to buy Regardless whether the car is purchased directly from dealers, or an older person takes over a car lease for the duration of the term, the lessees have the option to when they reach the conclusion of their lease, purchase a car to purchase the exact amount stipulated in the lease. If you’re considering whether to purchase it’s crucial to look at the car you lease as if you were shopping for the purchase of a . Determine if the vehicle is priced in a similar manner to similar cars similar to the same brand and model, in the same condition and with similar mileage. If that’s the case, then it may be a good financial choice to buy. Be aware that the price increase will occur after the lease expires since the vehicle will no longer be under the same warranty. The cost of repairs and maintenance will be the owner’s responsibility. 3. Tax deductions Older adults who decide to lease a car and work part-time retired may be eligible for tax deductions. This information can be checked prior to time using the . If the vehicle is used for work, older drivers could be eligible to deduct a portion of the lease’s payment on tax returns, as well as the cost of vehicle upkeep and depreciation of the vehicle. The tax deduction is only available to those who are leasing a vehicle while in semi-retirement and still working in some capacity , but is something to think about. 4. Latest models A major benefit of leasing cars is the possibility to get behind the wheel of the latest vehicles on the market. The technology used in cars is constantly evolving, ensuring a much safer drive as compared to the past. For those who are older with a higher risk of injury, new features like reverseview cameras, parking assist and lane departure warnings are very beneficial. People who lease for a long time or who move from one lease from one to another, can be equipped with the most recent technologies and safety features installed in the vehicles they drive. 5. Vehicle warranty protection A leased vehicle will have warranty protection. It means that any repairs that the vehicle will need are covered and will not come out of your pocket. “With an leased car, you never have to worry about any out-of-warranty repairs since the vehicle will have its factory warranty for the duration that you lease it,” says Montoya. This type of warranty can be very valuable for people who are elderly, particularly those who may be on a limited budget, as it eliminates much of the anxiety or uncertainty that comes with owning a vehicle. However, drivers will usually have to cover minor maintenance such as the rotation of tires and oil changes. 6. Flexibility As a lease is typically for three years or less , and a car loan is typically for five years or more leasing offers more flexibility for those who aren’t certain of the amount of driving they’ll be doing over the coming years. It might be simpler for a retiree to predict their driving requirements just two years into the future — but it might become more challenging to forecast the requirements for driving over five years, because the needs of those who lease could change more rapidly. Tips to get the most favorable deal Before signing on to lease, be sure you’re getting the best deal you can. Here are a few tips to follow. Negotiate the cost of the car To obtain the most favorable deal for a car lease, try to negotiate the cost of the car by yourself, exactly like you would if you bought the car. Negotiating the price of sale is essential since it’s a key factor in calculating the cost of leasing the car. If you are planning to negotiate, however, make sure to use Kelley Blue Book to better comprehend the current market prices and if you’re getting the best price. Find pre-negotiated prices. A different option is to go with services that offer pre-negotiated rates. Companies like AAA (American Automobile Association), Costco and TrueCar offer these options, or you may go through your local bank. Only take what you require. Other factors influence the cost of lease payment, including what is the value remaining on the car, the length of the lease and the mileage limitations. When considering a lease, you should ensure that you choose one that comes with an adequate mileage allowance to avoid any additional mileage fees. Also aim to pay no more than $1,000 in fees associated with obtaining the lease, also known as “drive-off” fees. Alternative options for renting a vehicle is taking over the lease from a person who is looking to end their lease earlier. A eliminates the need to negotiate the lease and deposit with the dealer, since those steps have already been completed by the first lessee. It’s just a matter of getting a takeover deal for the vehicle you want and one that has an affordable monthly payment. “There are websites that help in the process of swapping your lease with an owner who is not yours,” says Montoya. “But lease swaps may not be available to all manufacturers.” The lease marketplace SwapALease, for instance, offers a platform for lessees to can sell their leases to taking over and car buyers can peruse available cars. It is essential to pay close attention to the remaining miles and the time left on the lease to ensure that the lease will satisfy your requirements. The bottom line: Leasing a car instead of buying is a viable alternative for older drivers depending on your budget and how you plan to utilize the car. But weigh the pros and cons of leasing before you sign on the dotted line. If you do not plan to buy the vehicle at the conclusion of the lease and you’re setting yourself up for the possibility of never-ending car payment. If you’re considering going with a lease, research market prices of the vehicle you’re interested in to ensure you can negotiate the best deal possible.
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Writen by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers with the ins and outs of securely using loans to buy an automobile.
Edited by Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain the confidence to control their finances through providing clear, well-researched information that breaks down otherwise complex subjects into digestible pieces.
Auto loans editor
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