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If you need a vehicle, you have the option of purchasing or leasing one. There are some definite reasons why you might want to consider contacting a Bay Area car leases dealership. At the same time, leasing has some drawbacks too. It will help to review both before making your decision to buy or lease.

Advantages and disadvantages of car leasing over buying

Let’s look at the advantages and disadvantages of car leasing over buying

Advantages of car leasing

Lower monthly payments

For a car purchase, the loan repayment rate you get will be determined by your credit history and the down payment you can make. And it could take you up to seven years to finish paying off the loan.

When you lease a vehicle, you are not burdened with car loan payments. You only have to be concerned with making regular monthly lease payments for the duration of your lease. These are generally lower than what you would have to pay every month for a car loan, and the lease duration can be anywhere from three months to three years. Even with the sales tax and overhead costs, leasing will be more affordable than buying a car.

Access to new car models

When you buy a car, you are stuck with the same model until you finish repaying the car loan. And later, if you decide it is not the right vehicle for you, there will be the issue of selling or disposing of it.

On the other hand, when you decide to lease, you are not stuck with the same car model year in and year out. After your lease contract expires, you can renew it with a different vehicle. You will be able to try out some of the latest car models with cutting-edge technology and safety features.

No warranty issues

It is necessary to purchase an expensive warranty when you buy a car. The warranty will cover any repairs you might need to undertake if the car should break down or get into an accident.

With a leased car, you do not have to bother about a warranty. As per the lease contract, the dealership will be responsible for paying for the car repairs if the breakdown happens through no fault of yours. Read the agreement carefully before leasing to make sure it includes this clause.

No price negotiation issues

Haggling over the final car price is an unavoidable part of making a car purchase if you want to save your money, but something that many people find unpleasant and stressful.

It is possible to avoid this issue when you lease a car. The dealership will offer a non-negotiable price. You only have to find a vehicle that fits your budget and sign the leasing contract.

No depreciation problems

A new car will start depreciating from the moment you drive it off the Bay Area car leases dealership lot. In the first four years, it will have lost 60% of its total value. Yet you will still be paying for the total value of the loan and you will also have to buy insurance for the car.

With a car lease, depreciation is not a big issue. You can switch to a newer model when your lease contract is up.

Disadvantages of car leasing

The necessity of a stable income

You must provide income or employment proof to the dealership before they approve your car lease. It is also necessary to make regular monthly payments to avoid car repossession or a bad credit score.

May require a large down payment

Leasing a car might require a significant down payment. You will have to pay that amount out-of-pocket. It will be necessary too to buy a gap insurance policy that will be in effect for three years and will cover the depreciation of the car value in the period of the lease.

Restrictions on car usage

During the lease period, the dealership may specify the number of miles you can drive annually, usually up to 15,000 miles, and expect sound car maintenance. They will charge extra for a higher odometer reading. If you damage the vehicle, the dealership will deduct the costs from your security deposit.