It’s no secret that young families have plenty of bills to pay. They spend money on housing, utilities, food, mobile data and Netflix subscriptions, you name it. Also, if they don’t have a lot of money saved up but need a new set of wheels, that can put more financial pressure on them.
So, what can you do if you’re just starting out? How can you afford to buy a car when you don’t have a lot of cash to pay for it upfront? The most affordable way for young families to get a car is either through financing or a car lease.
Nowadays, more and more people are passing up on car loans and leaning towards leasing a car. In fact, nearly a third of vehicle sales can be attributed to leasing. But before you get lured in by the low lease payments, know first if car leasing makes sense for you.
What are the downsides to leasing a car?
If you lease the car longer, your overall costs will become much higher. The number of kilometers you can use on your leased car is limited. And if you go over it, you may pay extra fees.
If you’re big on vehicle customization, then leasing a car is not for you because you have less freedom to do so. Moreover, leasing can be a bad idea because you don’t own the vehicle when your lease is up. And you’ll have nothing to show for all that money you spent.
When does a car lease make sense?
It all boils down to your financial situation. For young families who can’t afford to buy a house right away, they can rent an apartment for several years.
While owning is better than renting, it can be a better short-term option until you have enough money saved in several years.
Many young families are searching for a reliable and new car they can use for their everyday needs. So, leasing can help them achieve this for the time being until they reach a point where they can afford to own one.
Also, there are several instances where leasing can offer many benefits in the short-term. These reasons include:
Lower monthly payments
If you don’t have a huge monthly cash flow, leasing makes more sense since your monthly payments are significantly lower compared to paying in cash or taking out a car loan. If you buy a car outright, your money is tied to it, so you can’t spend much on other things.
More car for your cash
If you like to be on the cutting edge of technology or want to enjoy the latest features, you can get a new car, every three years or so, once your car lease is up. You can just return your car and trade up for a new set of wheels.
Leasing has become a huge draw for many folks because of the tax relief they can get. Most of the time, the taxes you pay on a leased car a much lower compared to when choosing to purchase a new vehicle.
Less stress on maintenance
Keep your car in excellent shape can be costly. If you’re the type of person who doesn’t like to pay for repairs, car parts and such, you don’t have to worry about those things because, most of the time, your monthly payments include the maintenance and warranty of your vehicle.
Whether you decide to buy, take out a loan, or choose to lease, it all comes down to your budget and financial situation. For many young families that are just starting to establish themselves, a car lease may be more beneficial for them in the short-term.
What are your thoughts about car leasing? Do you think it’s a good idea? Have you leased a car? How was your experience? Let me know in the comments.