Trying to decide if a lease is the right move is something that causes confusion even for the most astute among us. The issue is that there is no easy answer.
Weighing the pros and cons of leasing a luxury vehicle depends on many factors unique to each situation.
In this article, I will provide some food for thought that I hope will steer you in the right direction.
Is it smart to lease a luxury car?
There are definitely some circumstances in which leasing is the smart move.
For instance, do you love the idea of driving a new car every three or four years, yet, absolutely loathe the idea of having to go through a trade-in with a dealer?
If you answered yes to those questions then a lease is probably a good idea for you. Especially in the case of luxury cars since you are only paying for the depreciation of the car. In many cases, the lessor will have a maintenance plan included which means that luxury cars are being returned in almost new condition. This reduces the depreciation of luxury cars and results in lower monthly payments compared to purchasing a new one.
Of course, this is highly dependant on your driving skills, as well.
There is no one-size-fits-all scenario when it comes to personal contract hiring. Many companies do offer flexible car leasing options that suit just about every budget and need. Meaning there is little downside to leasing a luxury car.
Negatives about leasing compared to purchasing
With something as complex as leasing a luxury vehicle, it should come as no surprise that there are some situations in which it would be undesirable to lease.
One such negative is the issue of ownership. Many people want to feel like they own the car they are driving. They often feel as though they are driving somebody else’s car.
This should not be the case, really. For instance, when you buy a car the reality is that the bank owns it for the four or five years of your finance terms.
Another thing to consider is that at the end of the lease contract there is no resale value of the car. The key is simply handed off to the lessor.
Sizing things up
Driving a luxury vehicle can also be looked at as an investment in yourself. If you need to make a certain impression that only a luxury car can provide, you may find yourself landing the client or the high profile job. All without the upfront expense of purchasing the same car.
In fact, if things go well, at the end of the lease you may find your car is worth more than the original estimated residual value. In this case, it can be a smart idea to buy the car, giving you a much better deal than if you had purchased the car in the beginning.
These are just some things to consider before jumping into a lease or even a purchase. It pays to familiarize yourself about how car leasing works to really make an informed decision.