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Are leasing cars best than renting a car for people who are older? Part Of Leasing the Vehicle In this series Leasing a Vehicle
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5 min read Published March 03, 2023
Written by Rebecca Betterton Written by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers to navigate the details of using loans to buy an automobile.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers gain confidence to control their finances with concise, well-researched, and clear information that is broken down into complex topics into manageable bites.
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Leasing a car may not be the top choice for an older person, but it can be a better option than purchasing a new vehicle for certain. People with fixed incomes that want to drive a new car that has the latest security features every few years or want less of a financial commitment to their car may benefit from leasing rather than the long-term commitment to purchase. Six advantages of leasing are a variety of benefits older individuals should take into consideration before deciding whether leasing a car is the best option for them. 1. Lower monthly payments Leasing a car typically means a lower monthly payment and lower upfront costs than buying a vehicle. The monthly payments are lower since when you lease you only pay a small percentage of the total cost of the car. “Although the price difference between leasing to buying has significantly decreased over the last few years…the monthly payment should be less expensive than purchasing a car” says Ronald Montoya, senior consumer advice editor at Edmunds. The overall ownership costs throughout the lease could also be lower due to the vehicle being covered by the warranty of the manufacturer. In essence, the main expenses an older adult needs to be thinking about when leasing a car include whether the lease’s cost will be affordable, cost of gas and expenses related to . The average monthly rent payment for leases is around $578 . Although the monthly installments could be lower, unless you choose to buy the car at the close of the lease, there will always be vehicle payments for those who switch from one lease to another. This can be a problem for individuals who no longer receive a regular income in. When budgeting for a lease, keep in mind that, while monthly payments can be less costly however, lease agreements can include additional costs and charges, such as fees for exceeding mileage limits that could be a problem if you intend to do a large deal of traveling or road-tripping. 2. Choice to Buy Regardless of whether the vehicle is secured directly from the dealer or an older person takes over a car lease for the rest of the lease, lessees can choose to purchase when they reach the conclusion of the term for the amount stated on the contract. If you’re considering whether to purchase it’s crucial to look at the leased car like you would if you were shopping for the purchase of a . Find out whether the car is priced the same as other cars of the same make and model in the same condition, and with similar mileage. If that’s the case, then it may be a smart financial decision to buy. Remember that the increase will occur after the lease expires since the car will no longer have the same warranty. Repairs and maintenance will be the owner’s responsibility. 3. Tax deductions Senior citizens who choose to lease a vehicle and who are working part-time retiring may qualify for tax deductions. This information can be checked ahead of time through the . If the vehicle is used for work, older drivers might be able to deduct a part of the lease’s cost on tax returns, as well as the cost of maintenance for the vehicle and the vehicle’s depreciation. The tax deduction is only available to drivers who lease their vehicle during semi-retirement, and are working in some capacity , but is something worth considering. 4. Latest models A major benefit of leasing vehicles is the opportunity to drive one of the latest vehicles on the market. The technology available in vehicles are constantly evolving and provides more safety on the road than in the past. For those who are older who are concerned about their safety, modern features, such as reverseview cameras, parking assist and lane departure warnings are very beneficial. If you lease for a long time, cycling between leases to the next, will always have the most up-to-date technology and safety features on the cars you drive. 5. Warranty protection for your vehicle A leased vehicle will have warranty protection on it. This means any expected 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 any non-warranty repairs, since the car comes with a factory warranty throughout the term that you lease it,” claims Montoya. This type of warranty is extremely beneficial for people who are elderly, particularly those who may be on a limited budget, as it eliminates much of the financial uncertainty or guesswork associated with ownership of a vehicle. Drivers will, however, generally have to pay for small maintenance items like the rotation of tires 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 can provide greater flexibility to people who aren’t sure the amount of driving they’ll be doing in the coming years. It might be simpler for a retiree to predict their driving requirements just few years out However, it may be more difficult to predict the requirements for driving over five years, because these requirements could change more rapidly. Tips to secure the best deal Before signing on to a lease, make sure you’re getting the best deal you can. Here are some suggestions to follow. Negotiate the price of your car to get the best deal on a car lease 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 the primary factor that determines the cost of leasing the car. Before you try to negotiate, be sure to check the Kelley Blue Book to better understand market pricing and whether you’re getting the best deal. Search for prices that have been negotiated. Another option is to utilize an online service that provides pre-negotiated rates. Organisations like AAA (American Automobile Association), Costco and TrueCar offer these services, or you could go through a local bank. You can only get what you need. There are a variety of other variables that impact the cost of lease payments which include what is the value remaining on the vehicle as well as the length of the lease as well as the mileage limits. When contemplating a lease make sure you only sign a lease that has an adequate mileage allowance to avoid excess mileage charges. Be sure to not pay more than $1000 in fees for obtaining the lease, which is commonly referred to as “drive-off” charges. Other alternatives to leasing a car is to take over the lease from a person who wishes to get out of their lease early. This eliminates the need to negotiate the lease and a deposit with the dealer, as these steps have already been completed by the first lessee. It’s merely a matter of finding a takeover offer on a car that you might want and one that has an affordable monthly cost. “There are websites that assist in swapping your lease to another owner,” says Montoya. “But lease swaps are not available to all manufacturers.” The marketplace for leases SwapALease is a good example. lets lessees can sell their leases to purchase and buyers can peruse available cars. But it is important to keep an eye on the remaining miles and the time left on the lease to ensure that the lease will meet your needs. The bottom line: Leasing an automobile instead of purchasing is a viable option for older drivers, depending on your budget and the way you will use the vehicle. Be sure to weigh the pros and cons of leasing before signing on the dotted line. If you do not plan to buy the vehicle at the end of the lease term and you’re setting yourself up for the possibility of never-ending vehicle payments. If you plan to proceed by leasing, do your research on the market price of the car you’re interested in to ensure you get the best bargain that you can.
Writen by Auto Loans Reporter
Rebecca Betterton is the auto loans reporter for Bankrate. She specializes in assisting readers to navigate the ins and outs of securely borrowing money to purchase an automobile.
Editor: Rhys Subitch Edited by Auto loans editor
Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers feel confident to manage their finances with precise, well-researched and well-written facts that break down complex topics into manageable bites.
Auto loans editor
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