Leasing a car may not be prominent on your radar screen, but it actually could be the better option depending on your circumstances. If you’re on a fixed income and want to drive a new car with all the latest features, or you’re looking for a shorter financial commitment, then leasing might be ideal for you.
It’s worth keeping in mind that as a senior your requirements of a car can change more frequently than a younger driver. As such being able to easily change your vehicle every few years to accommodate those changes can be a real boon. Typically a lease is for three years or less. As the financing for a car purchase is often five years, leasing also provides the flexibility you may need if it’s possible that you will start driving less in the next couple of years.
Lower monthly payments
Unless you are able to pay cash for a new car, a lease will cost you less per month. Depending on the vehicle and the incentives, at times the lease payment will be substantially lower.
“Leasing can be a great option to drive a lot of car for the money for seniors,” says Jesse Toprak, senior analyst for TrueCar Inc. “Leases typically require lower upfront costs and have lower monthly payments (than buying the same car). Overall ownership costs are lower due to the car being under the factory warranty.”
Lower out of pocket expenses
Basically, all that you need to think about with a leased car is the lease payment, gas costs and insurance. “For someone on a fixed income, it can be very easy to budget for,” says Phil Reed, Edmunds.com senior consumer advice editor. “If the monthly payments fit your savings or income, no other additional expenses will arise.”
Your leased vehicle will be under warranty for the entire time you have it, and some automakers even cover the cost of maintenance.
Making it easier for heirs
Nobody wants to think about being gone, but none of us is immortal. Should the end come with a purchase, especially early in a standard finance contract, unless a lot of money was put down, the balance owed will be higher than the value of the vehicle, leaving the estate or the surviving spouse liable for the deficit. As we already discussed, it is easier to get out of a short-term lease than a long-term finance contract.
You can negotiate the price
One of the most common things people don’t realize is that lease prices can be negotiated. Most customers just are not aware that there is still a selling price in leasing. Simply negotiate the selling price of the car you want to lease as if you are purchasing it. Negotiating the price is vital because it is a key factor in calculating the car lease payment. Other factors involved in calculating the lease payment include the residual value of the car, the length of the lease, typically two to four years, and the mileage limits, usually 10,000 to 15,000 miles per year.