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Do you think leasing a car is best to older motorists? Part Of Leasing a Vehicle In this series 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 ways and pitfalls of taking out loans to purchase the car they want.
The edit was done by Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate from late 2021. They are committed to helping readers gain confidence to take control of their finances by providing clear, well-researched information that is broken down into complex topics into manageable bites.
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The idea of leasing a car might not be top-of-mind for someone who is older but it may be a better choice than buying a new car for some. Seniors with fixed incomes and who wish to own a brand new car with the latest security features every few years or who want a shorter term commitment to their vehicle may be benefited by leasing instead of the long-term commitment of buying. Six benefits of leasing are many benefits that older people should consider before deciding whether leasing a car is the right choice for them. 1. Lower monthly payment Leasing a vehicle typically requires the payment of a lower amount per month and lower upfront costs than buying an automobile. The monthly payments are lower due to the fact that when you lease, you’re only paying a portion of the total price of the vehicle. “Although the price difference between leasing to buying has significantly narrowed during the past few years…the monthly payments will be less costly than purchasing a vehicle,” states Ronald Montoya, senior consumer advice editor for Edmunds. The total cost of ownership throughout the lease could be lower because of the vehicle being covered by warranty from the factory. In essence, the main expenses that an older person must be thinking about when leasing a car are whether the lease’s cost is affordable, the fuel costs, and other expenses related to . The typical monthly leasing payment of $578 . While the monthly payments may be less, unless you decide to purchase the vehicle at the expiration of the lease, there will always be car payments for those who continue to move from one lease to the next. This can be a problem for those who don’t have a regular source of income coming in. When budgeting for leases be aware that even though monthly payments might be less expensive however, lease agreements can include additional fees and expenses such as costs for exceeding mileage limits, which can be an issue if you plan to do a great amount of travel or road-tripping. 2. Option to buy Regardless whether the car is secured directly from a dealer, or a senior person takes over a car lease for the duration of the term, lessees have the option to at the end of the lease to purchase the car at the price stated in the lease. If you are considering buying, it’s important to consider the leased car like you would if you were shopping for the purchase of a . Check if the car is priced in a similar manner to similar cars of the same make and model, in the same condition and with similar mileage. If that’s the situation, then it could be a wise financial decision to buy. Be aware that the price increase will occur once the lease ends since the car will no longer be under the same type of warranty. Repairs and maintenance will now be the sole responsibility of the driver. 3. Tax deductions Senior citizens who choose to lease a vehicle and work part-time in retirement may benefit from tax deductions. The information is available in advance through the . If the vehicle is used for work, older drivers may be able to deduct some of the lease’s cost on their tax returns, in addition to the cost of maintenance for the vehicle and depreciation of the vehicle. This tax deduction benefit is only available to those who are leasing a vehicle while in semi-retirement and still working in some capacity , but is something to consider. 4. Latest models A major benefit of leasing vehicles is the ability to get behind the wheel of the newest vehicles available in the market. The technology in automobiles are constantly evolving and provides an even safer driving experience than it was in the past. For people who are elderly with a higher risk of injury, new features like rearview cameras, parking assistance and lane departure alerts are extremely beneficial. If you lease for the long term, cycling between leases from one to another, can always have the most up-to-date technology and safety features in the cars you drive. 5. Vehicle warranty protection A lease vehicle comes with warranty protection on it. That means any anticipated repairs the vehicle may need are covered and won’t cost you anything out of pocket. “With an leased car, you never have to worry about out-of-warranty repairs since the vehicle is covered by the manufacturer’s warranty throughout the term of the lease,” says Montoya. This type of warranty is extremely beneficial for those who are older, particularly those with an extremely tight budget as it eliminates much of the anxiety or uncertainty that comes with vehicle ownership. However, drivers will generally have to pay for small maintenance items like the rotation of tires and oil changes. 6. Flexibility Since the lease typically lasts for three years or less and the car loan is typically for five or more years leasing offers greater flexibility for those who are unsure how much driving they will be doing in the coming years. It might be simpler for a retiree to predict their requirements for driving a couple of years away however it could become more challenging to predict 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, ensure that you’re getting the best deal you can. Here are some suggestions to help you do that. Negotiate the car price To find the most affordable price for a car lease attempt to negotiate the price of your car on your own, much like you would if you bought the car. Negotiating the price of sale is crucial since it is an important factor when calculating the car lease payment. When you attempt to negotiate, however ensure that you 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 a service that offers already-negotiated prices. Organizations such as AAA (American Automobile Association), Costco and TrueCar offer these options, or you may go through your local bank. Get only what you need Other factors influence the cost of lease payments, including how much residual worth of the vehicle, the length of the lease as well as the mileage limits. When contemplating a lease make sure you only sign the lease with sufficient mileage to avoid additional mileage charges. Be sure to not pay more than $1,000 in fees for obtaining the lease, which is commonly referred to as “drive-off” charges. Other alternatives to leasing cars is taking over the lease of someone who is looking to get out of their lease earlier. This eliminates the need to negotiate the car lease and deposit with the dealer because those steps have already been completed by the first lessee. It’s as simple as finding a takeover offer on the vehicle you prefer and which has an affordable monthly installment. “There are websites that help with swapping your lease to another owner,” says Montoya. “But lease swaps aren’t available for all brands.” The marketplace for leases SwapALease is a good example. lets lessees can sell their leases to taking over and car buyers can browse the available vehicles. It is essential to be attentive to the number of miles remaining and the duration left on the lease to ensure that the lease will meet your needs. The bottom line is that leasing the car instead of buying could be a great option for older drivers, according to your budget and how you plan to utilize the car. Be sure to consider the advantages and disadvantages of leasing before signing on the contract. Unless you plan to purchase the car at the end of the lease and you’re setting yourself up for the possibility of never-ending vehicle payments. If you’re planning to go with a lease, research market prices of the vehicle you’re considering so that you can negotiate the most favorable bargain 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 in navigating the ways and pitfalls of borrowing money to purchase the car they want.
The edit was done by Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since late 2021. They are committed to helping readers feel confident to take control of their finances through providing concise, well-researched, and clear information that breaks down otherwise complex topics into manageable bites.
Auto loans editor
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