What are the Incentives of Leasing a Car?

September 25th, 2023 by

If you’re looking for a new vehicle, one of the first choices that you’ll need to make is whether you want to purchase or lease it. When you purchase a vehicle, you will either pay the full price upfront or take out a car loan to pay off the vehicle over time. In either situation, you will eventually own that vehicle. A lease essentially lets you rent the vehicle long-term. There are many compelling incentives to lease your next vehicle rather than buy it.

Tax Perks

If you use your leased vehicle for business purposes, you can cash in on some great tax incentives. There are two handy options to choose from. You can either deduct the standard mileage rate based on the number of miles you drive for business, or you can deduct the exact expenses associated with your vehicle. For a leased vehicle, these expenses include:

  • The monthly cost of your lease payment.
  • The monthly sales tax on your lease.
  • Gas for your vehicle.
  • The cost of maintenance, including oil changes, tire replacements, and vehicle repairs.

Keep in mind that you can only take advantage of these tax perks if you’re temporarily leasing your vehicle. The tax incentives do not apply if you’re on a lease-to-own plan.

Access to Incentive Programs

Many car leases are eligible for special incentive programs that help cut back on your vehicle expenses. Check with your employer before leasing a vehicle, especially if you plan to use it for business purposes. Many companies participate in a corporate incentive program that will give you a steep discount if you lease your vehicle from a particular automaker.

Some leasing companies or automakers will offer special incentive programs that subsidize the residual value of the vehicle. The residual value is the difference between the initial price of the vehicle and its value at the end of the lease. This sum is what you pay over the life of the lease. For example, if the car is worth $30,000 at the beginning of the lease but only $15,000 at the end of the lease term, the residual value is $15,000.

If you can find an incentive program that subsidizes the residual value, you’ll pay less each month and ultimately enjoy a great price break on the total cost of the lease.

Financial Savings

Your monthly payments for leasing a vehicle are typically lower than the monthly payments for a car loan on the same vehicle. This is because a car loan is meant to pay for the total cost of the vehicle while your lease just covers the residual value, as mentioned above. If lowering your monthly expenses is a primary concern, then leasing a vehicle is a great way to cut back on your immediate costs.

A leased vehicle also has fewer maintenance expenses. Since leased vehicles are new and in good condition, it’s far less likely that you’ll need major repairs during the life of your lease. Leased vehicles are usually under the manufacturer’s warranty as well, which means that most repair costs are covered should they occur. You can even get free oil changes and basic maintenance with most lease plans. This means you can keep your car in excellent condition at little to no cost to you.

Higher-Quality Cars

When you’re leasing your vehicle, you’ll always be driving one of the latest models on the road. If you love the feel of cruising about in a brand-new vehicle, leasing is a great option for your lifestyle. You’ll get to experience the most modern technology available, from infotainment systems and advanced connectivity features to top-of-the-line safety systems.

Most car leases are 36 months. This means that you’ll get a new car every three years, just when your current vehicle approaches its first set of major maintenance milestones. You can handily avoid those costly visits to the shop as you swap your leased vehicle out for a new one. Every three years, your lease will allow you to explore the most recent advents in automotive technology once again. If you love playing with the advanced features and functionality of new vehicle models, the leasing lifestyle is definitely for you.

Convenient Vehicle Upgrades

Getting into a new vehicle is a complex and lengthy process if you’re selling and purchasing cars. When you own a vehicle, you typically need to pay off your car loan in full before you can sell it. If you’re still paying off the vehicle, you’ll need to deal with the complexities of having the purchaser pay off your loan. Once you’ve sold or traded in your old vehicle, you’ll need to walk through all the steps associated with securing a new car loan for your next vehicle.

If this sounds like too much work, you should consider leasing your car instead. A leased vehicle comes with a predetermined lease term. When the term is up, you simply return the vehicle, pay any applicable fees, and select your new leased car. The system is designed to streamline the process of swapping out your last car for an updated version, making everything as quick and painless as possible.

The Chance To Try Before You Buy

Some leases have a purchase option at the end of the lease term. If you think you may want to keep the vehicle, this is a great way to thoroughly test it out before you commit to keeping it. If you’re not ready to relinquish your ride after the lease is up, you may have the option of transitioning from a lease to a car loan, keeping the same vehicle that you’ve already settled into.

A car lease can give you the versatility that you need to take ample time to make the right decision for your personal and financial situation.

Set Up Your New Lease

If you’re interested in leasing a new vehicle, our team at Mazda of Orange in Orange, California, can walk you through the entire process. Our finance department  is on hand to make your new lease process as fast and simple as possible. Come visit us today.

 

black mercedes benz c class coupe by Austin Lowman is licensed with Unsplash License

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