Benefits of Leasing a Car

Leasing offers several benefits, from low eligibility requirements and access to the newest cars to building credit and paying less for maintenance. You can also use lease-end options that suit your needs, including subscribing to FINN’s fleet of capable and affordable vehicles. 

1. You don’t need a large down payment

Finding a way to lease a car with no money down can seem challenging, but leasing comes with lower costs than you would pay if you financed instead. You don’t have to make a sizeable down payment, which can help you get into a car for less. Paying less upfront also gives you peace of mind because you can use any extra funds to save for a rainy day. 

2. You don’t need a perfect credit score

It’s common to see ideal car lease terms advertised on TV, but the truth is that you can find affordable lease deals without having a credit score over 750. The odds of a leasing company denying your application are slimmer than if you were to finance. You can also capitalize on looser credit score requirements for leasing without jumping through too many hoops. 

For example, you can use a cosigner with a higher credit score than your own to increase your approval odds and obtain a lower interest rate. Even if you don’t meet the credit score requirements to get a low interest rate, you can typically minimize your risk with a security deposit or higher interest payments. 

3. You get to drive newer cars

Some of the best car lease deals aren’t necessarily those you negotiated down to a bargain rate. Instead, these lease deals put you behind the wheel of a car you couldn’t otherwise afford if you financed instead. Leases are a great way to drive the latest models and live high on the hog. 

In addition to newer models, you also gain access to the latest features and technology, including advanced safety features that protect you in the event of an accident. You can also lease the newest model once your lease is up and continue the pattern until you’re ready to finance, buy, or subscribe to a car with companies like FINN.  

4. You pay for minimal maintenance 

Driving a car and not paying for maintenance is increasingly challenging. However, leasing can keep you off the hook for the most expensive maintenance costs. When you drive newer vehicles, you typically don’t have to worry about the significant maintenance intervals until further down the road. 

Most leased vehicles carry a manufacturer’s warranty for the first three years or 36,000 miles. If you drive a leased car within those limits, you shouldn’t need to pay for much more than the occasional oil change or tire rotation. That is if you don’t exceed normal wear and tear. 

5. You can use your lease to build credit 

Believe it or not, you can use your lease payments to build credit. Whether you want to boost your prompt payment history, expand your credit mix, or improve your credit utilization, a lease can positively impact your credit report. However, leasing can also have the opposite effect, so make sure you make your lease payments on time to keep up the good work. 

6. You have several options for getting out of a lease 

It’s easier to get out of a lease than a car loan. For example, you can swap your lease via LeaseTrader or SwapALease, terminate your lease early, roll your payments into another lease, or transfer your lease to someone else. While each option offers varying terms and fees, you at least have the freedom of choosing how you want to get out of your lease. 

7. You can claim your lease on your taxes 

If you drive a car for business for over 50% of the time, you can claim your lease payments on your taxes. In addition, the sales tax incorporated into your lease is lower than the sales tax you would pay on the exact vehicle's total finance or purchase price. You only use the leased car for a portion of its life, so you only have to pay a part of the sales tax. 

Even if you don’t drive your lease for business most of the time, you may still be able to claim a tax credit. The government offers tax incentives for electric vehicles (EVs) up to $7,500. Whether or not the dealership or leasing company passes those incentives to you is up to them. Calculated negotiating, however, could unlock access to this lucrative tax benefit. 

8. You can test-drive a car for longer 

Leasing minimizes the cost of owning a car if you no longer want to drive it after several years. Instead of stressing over how you’ll sell it, you can simply return the lease and choose your next move from there. Leases are often most common on EVs, as many people are skeptical about incorporating them into their daily lives. 

9. You can buy out your lease at the end 

Some, but not all, dealerships and leasing companies allow you to buy out your lease upon termination. For some folks who leased before the pandemic, lease buyout rates were historically low and allowed great deals. However, whether or not you can buy out your lease now depends on your leasing company and lease agreement terms. 

Leasing may not be a practical solution for everyone, especially considering the drawbacks of leasing a car. Here are a few to help you decide if leasing is right for you. 

• Lease agreements come with several limitations and restrictions, from how many miles you can drive and how you can use your leased car to what fees you’ll pay if you terminate the lease early. In addition, you cannot customize your leased car, but you are responsible for excessive wear and tear. 
• It’s harder to find lease deals, especially given the fluctuations in inventory and availability. Even if you’re a tough negotiator, dealers and leasing companies may not have a lot of wiggle room to work with. 
• Several dealerships and leasing companies are rescinding the lease buyout option in their lease agreements. 
• Many ask, “Is insurance on a leased car more expensive?” and the answer may surprise you. Car leasing with insurance can cost you more, depending on what coverage your leasing company requires. 
• Leasing can cost more than financing in the long run. Plus, you own the car after you’ve paid your last payment, which is not the case with a lease.

Before you sign a lease agreement, consider whether or not a car lease is in your best interest. You should also consider alternatives to make the best decision for your situation. 

The choice between leasing vs. buying vs. subscribing to a car depends on personal preference. If you have the cash and inclination to lease a car for a few years before you settle on a model to finance or buy outright, leasing can help you enjoy the cars you drive and build your credit. If you can find superb leasing deals, you may even get away with leasing for longer without losing a ton of money. 

However, leasing isn’t always the most practical solution. Leases limit how many miles you drive, how long you can lease a car, and your ability to customize your car. Insurance typically costs more for a leased vehicle because you need additional coverage. Fees and penalties can also rack up a lease bill quickly. 

Avoiding leasing altogether and turning to car subscription services like FINN could be your best solution. FINN offers a wide selection of vehicles and brands, with agreeable terms and affordable pricing. You can have your new subscription delivered right to your door and pay a single comprehensive payment. All you have to do is provide the fuel.