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Are leasing cars better to older motorists? A part of leasing a Vehicle In this series Leasing a Vehicle

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5 min read Published March 03, 2023

Authored by Rebecca Betterton Written by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She has a specialization in helping readers in navigating the details of taking out loans to purchase an automobile.

Edited by Rhys Subitch Edited by Auto loans editor

Rhys has been editing and writing for Bankrate since late 2021. They are committed to helping readers gain the confidence to manage their finances with clear, well-researched information that is broken down into complicated topics into bite-sized pieces.

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The idea of leasing a car might not be a top priority for someone over 50 however it could be a better option than buying a new car for some. Older adults on fixed incomes that want to get a brand-new vehicle with the most recent security features every few years or want to have an easier financial commitment to their car could benefit from leasing rather than the long-term commitment of buying. 6 benefits of leasing There are several benefits that older people should consider when deciding if leasing a vehicle is the right choice for them. 1. A lower monthly payment car typically means a lower monthly payment and lower upfront costs than buying an automobile. The monthly payments are lower due to the fact that when you lease, you’re only paying a portion of the total price of the car. “Although the price gap from leasing to buying has decreased in recent years…the monthly cost will be less costly than purchasing a car” claims Ronald Montoya, senior consumer advice editor at Edmunds. The overall ownership costs throughout the lease might be lower because of the car being under the warranty of the manufacturer. The main costs an older adult needs to consider when leasing a car are whether the lease payment is affordable, the gas costs and the costs associated with . The monthly average rent payment for leases is around $578 . Although the monthly payment may be lower, unless decide to purchase the vehicle at the end of the lease term and there are always car payments for those who continue to switch from one lease to the next. This can be a problem for those who do not have a regular source of income coming into. When budgeting for leases take note that while monthly payments may be less costly, lease agreements include extra costs and charges, such as fees for exceeding mileage limits and this can be an issue if you plan to do a great amount of travel or road tripping. 2. Option to buy Regardless whether the car is purchased directly from a dealer, or a senior person is able to take over a lease for the remainder of the lease, lessees are able to buy when they reach the conclusion of the term for the amount stated in the contract. When considering whether to buy it’s crucial to look at the leased car as if you were shopping for a . Determine if the vehicle is priced similarly to other vehicles similar to the same brand and model in the same condition and with similar mileage. If this is the case, then it may be a smart financial decision to purchase. Keep in mind that the cost will increase once the lease ends because the vehicle is no longer covered by the same warranty. Repairs and maintenance will be the sole responsibility of the driver. 3. Tax deductions Older adults who decide to lease a vehicle and who work part-time retiring may qualify for tax deductions. This information can be checked in advance through the . When using the vehicle to work, older drivers might be able to deduct some of the lease’s cost on their tax returns, as well as the cost of maintenance for the vehicle and the vehicle’s depreciation. The tax deduction is only available to drivers who are leasing a vehicle during semi-retirement, and are working in some capacity , but is something to think about. 4. New models The main benefit of leasing cars is the possibility to take control of the most modern vehicles on the market. The technology available in vehicles is constantly changing and ensures a much safer drive than it was in the past. For people who are elderly who are concerned about their safety, new features like rearview cameras, parking assist and lane departure warnings, are extremely beneficial. If you lease for the long term and then move between leases in the future, are sure to have the most up-to-date technology and safety features on the cars you drive. 5. Vehicle warranty protection A lease vehicle comes with warranty protection. It means that any repairs the vehicle may need are covered and won’t be a burden on your wallet. “With the lease of a vehicle it is not necessary to worry about any non-warranty repairs as the vehicle is covered by the manufacturer’s warranty for the entire duration that you lease it,” claims Montoya. This type of warranty is extremely beneficial for older individuals, especially those with the tightest budgets, since it takes away a lot of financial uncertainty or guesswork associated with vehicle ownership. However, motorists will usually have to cover small maintenance items like the rotation of tires and oil changes. 6. Flexibility Because a lease is typically for three years or less and a car loan typically lasts five or more years leasing may offer greater flexibility to people who aren’t sure how much driving they will be doing in the next years. It might be simpler for an older person to estimate their driving requirements just few years away however it could be more difficult to anticipate driving requirements over the course of five years as the needs of those who lease could change more dramatically. Tips to get the most favorable deal Before signing on to lease, ensure that you’re getting the best deal you can. Here are some suggestions to follow. Negotiate the car price To get the best deal for a car lease, try to negotiate the price of your car by yourself, exactly as if you were buying the vehicle. Negotiating the sale price is essential since it’s the primary factor that determines the cost of leasing the car. If you are planning to negotiate, however ensure that you use Kelley Blue Book to better understand market pricing and whether you’re getting the best deal. Search for prices that have been negotiated. Another approach is to use services that offer already-negotiated prices. Organisations like AAA (American Automobile Association), Costco and TrueCar provide these options, or you may go through a local bank. Only take what you require. A variety of other factors affect the cost of lease payment which include how much residual worth of the car and the duration of the lease as well as the mileage limit. If you are considering a lease, ensure that you choose one that comes with an adequate mileage allowance to avoid excess mileage charges. Also aim to pay no more than $1,000 in fees for obtaining the lease, which is commonly referred to as “drive-off” charges. Alternative options for renting a vehicle is taking over the lease from someone who is looking to get out of their lease early. A eliminates the need to negotiate the car lease and cash down with an agent, as these steps are already taken care of by the first lessee. It’s merely a matter of finding a takeover offer on a car that you might like and that comes with an affordable monthly payment. “There are sites that can assist in swapping your lease to the owner of another,” says Montoya. “But lease swaps aren’t accessible to all manufacturers.” The marketplace for leases SwapALease is one example. It provides a platform where lessees are able to offer their leases for purchase and buyers can peruse available cars. However, it is crucial to pay close attention to the amount of miles left and the duration remaining on the lease to make sure that the lease can meet your needs. The bottom line Leasing the car instead of buying could be a great alternative for older drivers depending on your budget and how you will make use of the car. However, you must take into consideration the pros and cons of leasing before signing on the contract. If you do not plan to buy the car at the end of the lease term it could set yourself up for the possibility of never-ending car payments. If you’re planning to go with a lease, research the market price of the car you’re considering so that you can negotiate the most favorable bargain feasible.


Writen by Auto Loans Reporter

Rebecca Betterton is the auto loans reporter for Bankrate. She is a specialist in helping readers in navigating the details of taking out loans to purchase the car they want.

The edit was done by Rhys Subitch Edited by Auto loans editor

Rhys has been writing and editing for Bankrate from late 2021. They are passionate about helping readers to control their finances by providing precise, well-researched and well-written data that can break otherwise complex topics into manageable bites.

Auto loans editor

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