One of the main reasons people decide to lease instead of buy is to get lower monthly payments and oftentimes they're able to get in to more car for their money. This is possible because if you choose to lease you don't make payments based on the current sales price of the car, but instead the expected future valuation of the vehicle. You've probably heard stories of just how much a vehicle depreciates when it leaves the lot, right? Essentially, with leasing, you merely wind up financing the difference between what the the vehicle's upfront costs and what it's residual value - what the car should be worth at the end of the lease. This particular set up creates a lower monthly payment in comparison to a traditional car loan, in which the customer needs to be lent the entire automobile price along with taxes and fees minus the down payment.

Fundamentally, the better the possible list price for the vehicle you are considering leasing, the less overall has to be included in a lease. Also, the nicer the car, the better it tends to retain the value, so leasing can help you get in to a top quality automobile for substantially less than you'd expect. Plus, an additional benefit with auto leasing is the fact that car warranties normally last 3 years which means you won't have to stress about fixing your new car either.

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So with all the advantages of leasing compared to buying a car, you may be wondering, "why would anyone decide to buy instead?" The reason is because leasing a car naturally comes with more restrictions and guidelines you have to follow which might not be suitable for some individuals. Listed below are some attributes that the ideal applicant for leasing will possess.

You don't tend to have the same car for more than six years. - Based on the terms associated with your auto loan, most vehicles are normally paid in full by the 6th year, which means that anything afterward would mean you don't have car payments and will usually still have equity in the car.

You have good credit, though not much cash on hand. - Since most leases will not require much cash down, if any, normally it's important to have a better than average credit score to be qualified for a lease.

You tend to not customize or modify your car. - In a lease, you don't actually own the car, the leasing company does, and that means you can't make just about any modifications to the vehicle.

You usually do not put more than 15,000 miles in a year. - Most car leases limit the number of miles you drive the vehicle to in between 10,000 and 18,000 and typically, the higher the amount of yearly miles allowed, the higher the monthly leasing payment. In case you go above the annual number of permitted miles, you'll usually be charge a substantial fee.