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Lease Car Deals - When Does a Lease Make Better Sense for Car Deals?

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Car leases were very popular until the auto industry started to decline. Automobile manufacturers stopped leasing cars to prevent the imbalance between lease value and actual value of the vehicle. The lease option has made a very strong comeback to revitalize auto sales of the most popular and more expensive models of luxury cars and sport utility vehicles. Brand new cars sitting on a sales lot are classified as a liability so car dealers have been working overtime to find creative ways to put drivers into new vehicles. Leasing is considered the better option for short-term use of a new car, but there are myths about leasing that cloud the decision to choose lease car deals over the traditional purchase.

Some people believe that regardless of the situation, buying a car is much less expensive than leasing. When the automobile will be kept for fewer years than the term of loan, leasing the car might be the better option. Cars depreciate more quickly than the loan is paid off, so the value of the car will not cover the remaining loan balance if a new car is purchased early. Negotiating a good lease deal is possible with enough information and knowledge about the factors that make up the lease terms. Just like a purchase negotiation process, the informed lessee can negotiate a good deal just like an informed buyer. Tax breaks do not apply only to businesses. Individuals pay substantially less sales tax on a leased vehicle. Car dealers will not assess substantial fees when the car is returned at the end of the lease. Terms for extra mileage are specifically stated in the lease agreement, so the cost for additional miles driven during the lease term should not be a surprise. If the lessee wants to end a lease before the end of the lease term, most dealers are more than happy to work with the lessee. All of these myths have been addressed over the years, and most people, who lease cars as a practice, enjoy the freedom of paying for the use of the car instead of the entire sales price.

More than half of all luxury cars and SUVs are leased. When the cars are returned at the end of the lease, the pre-owned car market inventory receives quality cars that have been maintained according to manufacturer recommendations. For those who purchase these lease returns, many years of useful driving remain. When sales are slow because of cash flow concerns, more leases are written by the dealers, and new cars are visible on the road. Drivers who lease cars will depend on the dealership service department for routine maintenance so the dealer’s business is strengthened. Cash-strapped business owners can replace obsolete vehicles by using a lease agreement and then deduct the entire lease cost as a business expense.

Car leases offer substantial advantages because the lessee is financing the use of the vehicle for an agreed period of time. Lower payments and no down payment mean that upfront costs are reduced. More expensive vehicles are 30-60% less expensive to drive under a lease agreement than the purchase price. Sales tax is paid only on the monthly payment in most states instead of on the entire sales price. Most dealers will require a security deposit at the time of the lease. The first payment is due when the lease agreement is signed and applies to the coming month. At the end of the lease, the car can be purchased for the depreciated resale value, but most people will choose to lease another car. For those who enjoy driving new cars every two or three years, the lease is the perfect financial instrument.

Whether the lease term has been fulfilled or the driver wishes to opt out of the agreement early, most dealers have options. Research and inquiries will provide the information required to make the best decision. If the original lessee encounters financial difficulty and is no longer able to make the lease payments, there are options to get out of that lease. There is an entire market for people who wish to take over a lease that has just a few months left. A transfer fee is paid to the dealer and the lease is picked up by another driver. When determining whether to purchase or lease to make the most of car deals on the market, find all the possible information and ask questions to prevent concern over being locked into a lease.

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