Collaborative Post¦ Go back fifty years, and practically everybody saved their money to buy a car outright. There were no such things as car loans. And there were certainly no lease payment options.
But thanks to innovations in the business world and changes in consumer preferences, that’s all changed. Now you just pay for your vehicle with a predictable fee every month. It’s the same as any other utility.
When you think about it, the same constraints operated with cars bought on loan. But there are key differences between regular loans and leases. And that’s part of the reason they’ve become so ridiculously popular.
Competition in the car leasing market is fierce. Everyone is trying to offer vehicles at the lowest price per month possible. And they’re using all sorts of strategies unavailable to regular consumers to achieve it.
One thing, they’re doing, for instance, is buying vehicles from manufacturers in bulk to lower the per-unit cost. They’re then passing on savings to customers.
They’re also getting deals by bundling insurance and other costs into the monthly price. Paying it all together is often cheaper than doing it separately.
There’s nothing worse than having a pile of money invested in stocks only to have to withdraw it to pay for a depreciating asset, like a vehicle. It’s a nightmare. But that’s what a lot of people wind up doing.
With leasing, though, you don’t have that kind of pressure on your wealth. You can continue saving, just as you always did. And then you can either pay or skip the car loan balloon payment when the term of the lease comes to an end. It’s that simple.
Some people need a vehicle. That’s just life. But running one the old-fashioned way is notoriously expensive.
When you lease, though, you cut your costs tremendously. All of a sudden, you wind up paying a fixed monthly fee which allows you to plan your outgoings to the dollar.
The cost of servicing and repairing vehicles over the course of their lives is tremendous. Figures often run into thousands of dollars over the lifetime of the vehicle. And the worst bit is that things can go wrong when you least want them to, leaving you on the hook for a large cash payment when you don’t have the money for it.
When you lease, though, you cut out all the big-ticket expenses. The amount you pay is just a fixed amount. And you usually get free servicing rolled into the price of the fee for the first three to five years you use the vehicle.
You Avoid Monopolies
The leasing market is massive, which means that prices tend to reflect the actual cost of providing you with vehicular services. In other words, you avoid monopolies and don’t wind up paying extra commissions you sometimes have to pay when you go to a dealership.
So are you thinking about leasing?
Disclosure: This is a collaborative post.
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