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Is leasing a car better for older drivers? The Benefits of Leasing a Vehicle In this series Leasing a Vehicle
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5 min read The publication was published on 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 borrowing money to purchase an automobile.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate since the end of 2021. They are passionate about helping readers gain confidence to take control of their finances by providing clear, well-researched information that is broken down into complex subjects into digestible pieces.
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The idea of leasing a car might not be the top choice for an older person however it could be a better choice than purchasing a brand new car for certain. Seniors with fixed incomes that want to own a brand new car with the latest security features every few years or who want a shorter term commitment to their vehicle might be benefited by leasing instead of the long-term commitment to purchase. Six advantages of leasing are many benefits that older individuals should take into consideration before deciding whether leasing a car is the best choice for them. 1. A lower monthly payment car typically means a lower monthly payment and lower initial costs than buying a vehicle. The monthly payments are less due to the fact that when you lease, you’re only paying a percentage of the cost of the car. «Although the price gap from leasing to buying has narrowed in recent years…the monthly payment is likely to be lower than purchasing a car» claims Ronald Montoya, senior consumer advice editor at Edmunds. The overall ownership costs throughout the lease may also be lower due to the car being in warranty from the factory. In essence, the main expenses an older adult needs to be thinking about when leasing a car include whether the lease payment is reasonable, gas costs and the costs associated with . The typical monthly lease payment is $578 . Although the monthly payment may be lower, unless you opt to buy the car at the end of the lease term, there will always be the car payment for those who continue to move between leases. This is a challenge for those who do not have a regular paycheck coming in. When planning a budget for a lease take note that even though monthly payments might be more affordable but lease agreements also include costs, like fees for exceeding mileage limits, which can be a problem if you plan to do a great deal of traveling or road-tripping. 2. The option to purchase a car irrespective of whether a car is financed directly through the dealer or a person who is older is able to take over a lease for the rest of the term, lessees can choose to purchase after the expiration of the term to purchase the exact amount stipulated on the contract. When considering whether to buy it is important to think about the leased car as if you were shopping for a . Check if the car is priced in a similar manner to other vehicles that are the same model and model in the same condition and with similar mileage. If this is the case, then it may be a wise financial decision to purchase. Remember that the cost will increase once the lease ends since the vehicle will no longer be under the same warranty. The cost of repairs and maintenance will be the responsibility of the owner. 3. Tax deductions Senior citizens who choose to lease a vehicle and who work part-time retiring may qualify for tax deductions. This information can be viewed ahead of time through the . When using the vehicle for work, older adult drivers may be able to deduct some of the lease’s cost on tax returns, in addition to the expense of maintaining the vehicle and the vehicle’s depreciation. This tax deduction benefit is only available for drivers who lease a car while in semi-retirement and still working in some capacity , but is something worth considering. 4. Latest models A major benefit of leasing cars is the possibility to take control of the newest vehicles available on the market. The technology in automobiles is constantly evolving, ensuring a much safer drive than in the past. For people who are elderly, the added security of new features like reverseview cameras, parking assist and lane departure warnings are very beneficial. If you lease for the long term and then move between leases in the future, are sure to be equipped with the most recent technologies and safety features installed in the cars you drive. 5. Protection for warranty on lease vehicle comes with warranty protection. It means that any repairs that the vehicle might need are covered and will not be a burden on your wallet. «With a leased vehicle it is not necessary 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. Warranty protection like this is extremely beneficial for people who are elderly, particularly those who may be on a limited budget, as it removes a lot of anxiety or uncertainty that comes with owning a vehicle. Drivers will, however, generally have to pay for small maintenance items like tires rotations and oil changes. 6. Flexibility Since a lease is typically for three years or less , and a car loan typically lasts five years or more leasing may offer greater flexibility to those who are unsure how much driving they will be doing in the coming years. It may be easier for an older person to estimate their requirements for driving two years out — but it might be more difficult to predict the requirements for driving over five years as the needs of those who lease could change more dramatically. Tips to secure the best deal. Before you sign lease, be sure you’re getting the best deal you can. Here are some tips for doing that. Negotiate the car price To find the most affordable price on a car lease Try to negotiate the car price on your own, much as you would when you purchase the vehicle. Negotiating the sale price is crucial since it is an important factor when calculating the lease payment. Before you try to negotiate, however, make sure to use Kelley Blue Book to better comprehend the current market prices and whether you are getting the best price. Search for prices that have been negotiated. Another approach is to use a service that offers pre-negotiated rates. Companies like AAA (American Automobile Association), Costco and TrueCar provide these services, or you can make use of a local bank. Only take what you require. There are a variety of other variables that impact the cost of lease payments which include what is the value remaining on the car, the length of the lease, and mileage limits. If you are considering a lease, be careful to only obtain the lease with sufficient mileage to avoid excess mileage charges. Be sure to not pay more than $1,000 in charges that are associated with the lease, which is commonly referred to as «drive-off» fees. Other options Another method of leasing cars is to take over the lease from a person who is looking to end their lease early. It is no longer necessary to negotiate the lease and the down payment with a dealer as these steps have already been completed by the original lessee. It’s as simple as finding a takeover offer on the vehicle you like and that comes with an affordable monthly cost. «There are websites that help in the process of swapping your lease with another owner,» says Montoya. «But lease swaps aren’t available for all brands.» The lease marketplace SwapALease is one example. It lets lessees can offer their lease for 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 remaining on the lease to make sure that the lease can fulfill your requirements. The bottom line: Leasing a car instead of buying could be a great option for older drivers, according to your budget and the way you will make use of the car. But weigh the pros and cons of leasing before signing on the contract. Unless you plan to purchase the car at the end of the lease period and you’re setting yourself up for the possibility of never-ending car payments. If you’re considering going with a lease, research the market price of the car you’re interested in to ensure you get the best bargain that you can.
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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 with the ways and pitfalls of using loans to buy a car.
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 to manage their finances with clear, well-researched information that breaks down otherwise complex topics into manageable bites.
Auto loans editor
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