Why Should Car Leasing Make A Comeback?

Over the last decade, buying a vehicle has been the most popular car ownership method. Car leasing and other forms of car ownership have taken a back seat to buying a car outright or entering into a credit agreement with a financial institution where the buyer will eventually own the car. But over the last year, the benefits of car leasing caused a rise in popularity. In 2022, 26% of luxury car owners leased their cars rather than buying.

Since the pandemic, the global economic landscape has been unsteady at best. Increased inflation and a cost-of-living crisis have many American citizens thinking about their financial situation and how to reduce overheads. Also, the price of cars has increased to $49,507 on average for a new car, and monthly repayments have increased to $728 on average. 

Every global business is feeling the pinch from consumers that are more conservatively spending their money. Every purchase must be carefully considered in today’s world, which is why car leasing should make a massive comeback after dipping during the pandemic.

There are major financial benefits in leasing a car rather than buying it for both businesses and individuals.

Financially-Viable Option

One of the significant perks of leasing is that compared to buying a car, it requires a small amount upfront and affordable monthly or weekly payments. Over the pandemic, many individuals and businesses have been put under financial strain. Some even had to dip into their savings frequently. 

Since car leasing requires much less capital than entering a credit lease or buying a car, this can be a more financially viable option for people and companies needing a vehicle but under financial strain. People can stay within their budget and acquire a vehicle without breaking the bank. 

Shorter Commitment

Along with car leasing being more financially viable, usually, a shorter commitment time is needed compared to a vehicle credit agreement. In these times of uncertainty, you never know what the future will hold.

In a short space of time, you could change careers, lose your job, or a newer, better version of your vehicle could be released. By leasing your car, you have the opportunity to explore other options and upgrade sooner than with a traditional buying/credit agreement method. 

It gives businesses, especially, more flexibility, as in a short period, they can expand rapidly and need bigger company vehicles to compete with rising customer orders. Car leasing gives people the option to make shorter and financially wise decisions. 

Technological Benefits

Technology is an area that is expanding and changing very quickly. More and more technology is being installed and utilized by our vehicles. These features include parking assistants, regenerative braking and, of course, electric and hybrid vehicles. By committing to a car lease, customers can remain on top of the technology curve with their shorter, cheaper contract time. 

Consumers no longer have to stay with outdated vehicles for long periods, as car leasing can give customers that sense of freedom. Customers will always have the updated versions of their favourite cars for less than paying for them outright. 

No Depreciation Worries

Along with the financial and technological benefits, people who decide to lease their cars instead of buying them do not have to worry about the depreciation of their new purchase. When buying a car, especially a new one, it is always a worry how fast your new, very expensive purchase will lose its value. This is especially the case when it is time to sell it and upgrade.

But by leasing your new vehicle instead of purchasing, that isn’t an issue. If the vehicle’s value drops while you are leasing it, it is not your issue but the lenders. Just another reason why leasing is set to become more popular with consumers in 2023. 

Less Maintenance

Cars and vehicles can be expensive to run and repair. If a car is leased, they do not need to go for regular maintenance or smog tests. This ensures that the person leasing the car does not have the same maintenance expenses as people who own their vehicles outright. While they still need to pay for repairs such as tyres or brake pads, the leasing contract and warranty will cover inspection tests and some of the vehicle’s maintenance. 

Mileage Cap

There are many benefits to leasing a car, but there are some stipulations to the leasing contracts. The main stipulation is a mileage cap. Car lease payments are usually based on a monthly or yearly mileage cap. When deciding the amount, this cap is usually well within what the consumer drives on average. Any exceeded amount will be subject to an extra charge, just like a mobile phone contract. It is something to be aware of when entering this type of agreement.

Also, when you finish your lease, be sure to shop around for your next contract instead of blindly accepting a new one from the same company. More often than not, you will find a better deal by shopping around. 

As the times we live in become more and more unstable, paying for something that is incredibly expensive and loses its value rapidly seems reckless and fool-hardy. With several benefits, car leasing seems like the more practical option. Particularly for people who are feeling the repercussions of the volatile global economy. As car prices still remain high, it may be in people’s interest to start leasing or extending their contracts until vehicle prices begin to drop.

Car leasing is a cost-effective and convenient way of procuring a new vehicle, which puts you in financial jeopardy. It is not surprising that more people are considering this route.

What do you think of car leasing in 2023? Is it the right to lease instead of buy? Share your opinion below!