With fewer restrictions and more flexibility than ever before, leasing may be the easiest path to the car of your dreams.
Hess Crockett, general sales manager at Mercedes-Benz of Baton Rouge, says when choosing whether to lease or buy your new vehicle, it’s important to first consider a range of financial and lifestyle factors. Leases generally allow for lower monthly payments compared with buying, as well as reduced maintenance costs and an easy transition into a new vehicle every two or three years. But that doesn’t mean leasing is the right move for every driver. If you want to modify your car or you’re the type of driver who likes to hang on to a car for years, buying may make more sense.
It’s also important to realize that leases have evolved greatly over the past 10 to 15 years, becoming more flexible and consumer friendly — particularly when they are through a luxury company that offers loyalty benefits for repeat customers. “There are more options in leasing than many people realize,” Crockett says.
Here are a few factors to keep in mind before signing on the dotted line.
How Long Do You Want to Keep the Vehicle?
Crockett says interest in leasing has increased considerably in recent years as consumers look to trade their vehicles in at a faster pace.
“You’re seeing people wanting to get cars sooner,” Crockett says. “The old adage of I’m going to pay it off and drive it for 10 years, we don’t see that much anymore.”
A typical lease is 36 months, while the term of most auto loans is generally at least 60 months. If you prefer to have a new car every three years, leasing may be your best option. Crockett says with leases today, the transition process into a new vehicle is more streamlined than ever.
Mercedes-Benz of Baton Rouge offers a VIP program that allows drivers who are leasing their car to select a new vehicle six months before their lease is up. The dealership works with the customer to select and customize their next vehicle to create a smooth transition once the lease ends.
“Right when the lease ends, they have the exact car that they want,” he says. “They’re not overpaying for something with more options that they don’t need. They can come in and pick exactly what they want.”
Consider Your Financial Needs
When leasing, you’ll pay a lower monthly note for your car because you’re not financing 100 percent of the cost of the vehicle. Repair and maintenance costs are also usually lower for leases because the cars are always under factory warranty. Conversely, repairs on a purchased vehicle are your responsibility once a warranty expires.
The potential financial impact of minor damage or a more substantial accident is another important consideration when choosing between purchasing and leasing. Crockett says Mercedes USA offers lease care packages for as little as $18 a month that protect consumers from minor damage to the vehicle. “It really makes for a good experience,” he says. “We find that people are really happy with it.”
For major accidents, leasing offers some financial protections compared with vehicles that are purchased. Accidents can dramatically affect the value of a purchased car, even when repaired. For leases, any loss in value from an accident ultimately falls on the car company, not the consumer, who is only responsible for the repairs. “There’s just less risk involved with a lease for any possible unfortunate circumstances,” Crockett says.
How Much Do You Drive?
Crockett says mileage restrictions are typically the biggest concern he hears from customers who are considering a lease. Most lease agreements allow either 10,000, 12,000 or 15,000 miles a year, although more miles can usually be purchased for an additional charge.
If you plan to drive 50,000 miles a year, you should think carefully about the financial consequences of leasing over buying. But Crockett says drivers should also know that they aren’t as boxed in by mileage restrictions as they might think.
Crockett says MBOBR regularly gets customers out clean from their leases six to eight months early through the Mercedes loyalty program, which can give a driver additional flexibility if it looks like they’ll be exceeding their mileage limit.
“If they want to take a vacation or they want to go see a family member out of state, they can,” he says. “If you have someone who you trust and someone who cares about trying to get you out of your vehicle into something else, there’s definitely certain parts of the lease where you have options.”
Content provided by our sponsor: Mercedes-Benz
Crockett says interest in leasing has increased considerably in recent years as consumers look to trade their vehicles in at a faster pace.
When leasing, you’ll pay a lower monthly note for your car because you’re not financing 100 percent of the cost of the vehicle. Repair and maintenance costs are also usually lower for leases because the cars are always under factory warranty. Conversely, repairs on a purchased vehicle are your responsibility once a warranty expires.
