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Are leasing cars best to older motorists? A part of leasing the Vehicle In this series Leasing is a Vehicle
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5 min read Published March 03, 2023
Authored by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers with the ins and outs of securely 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 from late 2021. They are committed to helping readers gain the confidence to control their finances by providing concise, well-researched, and clear information that breaks down otherwise complex subjects into digestible pieces.
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Leasing a car may not be the top choice for someone over 50 but it may be a better option than purchasing a new vehicle for a few. Older adults on fixed incomes and who wish to get a brand-new car that has the latest safety features every couple of years or want to have an easier time frame for their car could benefit from leasing instead of the long-term commitment to purchase. Six benefits of leasing are a variety of benefits older people should consider when deciding if leasing a vehicle is the right choice for them. 1. Lower monthly payments Leasing a vehicle typically requires the payment of a lower amount per month and lower initial costs than buying an automobile. The monthly installments are lower due to the fact that when you lease, you’re only paying a portion of the total cost of the car. “Although the price gap from leasing to buying has narrowed in recent years…the monthly payment will be less costly than purchasing a vehicle,” says Ronald Montoya, senior consumer advice editor for Edmunds. The overall cost of ownership during the lease might be less due to the car being under factory warranty. In essence, the main expenses an older adult needs to be thinking about when leasing a car is whether the lease payments is affordable, the cost of gas and costs associated with . The average monthly lease payment is $578 . Although the monthly payment may be lower, unless you choose to buy the car at the end of the lease term and there are always vehicle payments for those who switch from one lease to another. This is a challenge for those who don’t receive a regular income in. When planning a budget for a lease take note that, while monthly payments can be less costly but lease agreements also include costs and charges, such as costs for exceeding mileage limits, which can be a problem if you are planning to do a lot amount of travel or road-tripping. 2. The option to purchase a car irrespective of whether a car is purchased directly from a dealer, or an older person is able to take over a lease for the rest of the term, lessees can choose to purchase after the expiration of the lease for the amount stated in the lease. When considering whether to buy it’s crucial to look at the vehicle you are leasing like you would if you were shopping for an actual . Determine if the vehicle is priced the same as other vehicles of the same make and model in the same condition, and with similar mileage. If that’s the scenario, then it might be a smart financial decision to buy. Remember that the will go up when the lease is over since the vehicle will no longer be under the same type of warranty. Repairs and maintenance will now be the responsibility of the owner. 3. Tax deductions Senior citizens who lease a vehicle and who work part-time retiring may qualify for tax deductions. The information is available in advance through the . If the vehicle is used to work, older drivers may be able to deduct a part of the lease payment on tax returns, along with the cost of maintenance for the vehicle as well as the depreciation on the vehicle. The tax deduction is only available for drivers who are leasing a vehicle when they are semi-retired and 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 available in vehicles is constantly changing and ensures more safety on the road as compared to the past. For those who are older with a higher risk of injury, modern features, such as reverseview cameras, parking assistance and lane departure alerts are very beneficial. Those who continue to lease for the long term or who move from one lease from one to another, can be equipped with the most recent technologies and safety features installed in the vehicles you’re driving. 5. Protection for warranty on leased vehicle will have warranty protection on it. It means that any repairs that the vehicle might need are covered and will not come out of your pocket. “With an leased car you don’t have to worry about any out-of-warranty repairs, since the car is covered by the manufacturer’s warranty throughout the term of your lease” says Montoya. This type of warranty can be extremely valuable for those who are older, particularly those on an extremely tight budget as it takes away a lot of financial uncertainty or guesswork associated with ownership of a vehicle. Drivers will, however, usually have to cover minor repairs like tires rotations and oil changes. 6. Flexibility Since leasing is usually for three years or less , and a car loan typically lasts five years or more leasing offers greater flexibility to those who aren’t certain of the amount of driving they’ll be doing over the coming years. It could be easier for a retiree to predict their driving requirements just two years into the future However, it may become more challenging to predict driving requirements over the course of five years as the needs of those who lease could change more drastically. Tips to get the most favorable deal before signing a lease, make sure you’re getting the best deal possible. Here are some tips for doing that. Negotiate the car price To find the most affordable price on a lease car Try to negotiate the price of your car on your own, just as you would when you purchase the vehicle. Negotiating the selling price is important because it is a key factor in calculating the cost of leasing the car. When you attempt to negotiate, however be sure to check the Kelley Blue Book to better know the market price and whether you’re receiving the most favorable deal. Search for prices that have been negotiated. A different option is to go with services that offer pre-negotiated rates. Companies like AAA (American Automobile Association), Costco and TrueCar provide these options, or you may use your local bank. You can only get what you need. There are a variety of other variables that affect the price of lease payments, including what is the value remaining on the car as well as the length of the lease and the mileage limits. When considering a lease, you should 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 associated with obtaining the lease, commonly called “drive-off” charges. Other alternatives to leasing cars is to take over the lease of someone who is looking to terminate the lease early. It is no longer necessary to negotiate the lease and the deposit with the dealer since those steps are already taken care of by the initial lessee. It’s merely a matter of getting a takeover deal for the car you like and that comes with an affordable monthly installment. “There are websites that help in the process of swapping your lease with another owner,” says Montoya. “But lease swaps aren’t offered for all brands.” The lease marketplace SwapALease is a good example. lets lessees are able to offer their leases for taking over and car buyers can browse the available vehicles. However, it is crucial to be attentive to the amount of miles left and the duration remaining on the lease in order to ensure that the lease will satisfy your requirements. The bottom line: Leasing a car instead of buying is a viable option for older drivers, according to your budget and the way you intend to use the vehicle. But take into consideration the advantages and disadvantages of leasing prior to signing the”dotted line. If you do not plan to buy the vehicle at the conclusion of the lease and you’re setting yourself up for a lifetime of car payment. If you’re considering going with a lease, research market prices of the vehicle you’re considering so that you can negotiate the best deal that you can.
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Authored by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ways and pitfalls of taking out loans to purchase a car.
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 passionate about helping readers gain the confidence to manage their finances by providing clear, well-researched facts that break down complicated topics into bite-sized pieces.
Auto loans editor
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