“Lease or finance?”

People ask me this question every day.  As Internet Sales Manager at the Honda dealer in Venice Florida, it comes with the territory. And since my remuneration comes as a flat fee as opposed to commission you can count on my objectivity when providing answers.


Back in the day car finance was the best option. Not now. The escalating cost of vehicles plus the trend to maximizing return on assets now suggest that leasing is the common sense choice for most consumers. The facts are quite conclusive!


Yet there are some people for whom financing is the best, or in some instances, the only option. I’ll cover this later.


So let’s get right to it! Here are 17 reasons why, for most consumers, leasing is the smart way to go:


  1. You have use of the vehicle in its best years

Leasing will ensure that you’ll have use of the vehicle during the best part of its life. This helps you avoid costly repairs and you’ll get the latest safety and technology features.


  1. The vehicle remains under warranty

Having the vehicle covered by warranty for the duration of ownership gives cost certainty and fewer unexpected repair expenses. Plus repairs are

done at a factory-authorized facility using original, not generic parts.


  1. Lower downpayment

Leases requires lower down payments, freeing funds for other things.


  1. Lower monthly payments

You’ll get lower payments with leasing — that’s less stress on your budget.


  1. Guaranteed term end value

Leasing has the advantage of offering a guaranteed residual value when the lease ends. That way you are not at the mercy of fluctuating market conditions.


  1. Meets your needs better

Leasing allows you to buy more car for your money.


  1. Better absorb previous deficiencies

Leasing means you can better absorb previous deficiencies. Having a lower upfront cost and payment you’re better able to absorb a deficient  balance  on your trade-in and still fit the vehicle in your budget.


  1. Sales tax advantages

When leasing in Florida you pay less sales tax. You are charged on the payment only. With financing, you pay sales tax on the full value of the vehicle. That way, when you sell your financed vehicle privately after 3 years, you lose the tax difference. If you trade it in you recoup tax on the depreciated value of the vehicle. Regardless,  you would pay less sales tax up front when you lease so you would have the difference to put in an interest bearing account.


A caveat: the actual tax advantage to you of leasing, varies from state to state


  1. Shielding from the effect of an accident

Leasing means that should you have an accident you pay your deductible only.  For insurance repairs you simply return the vehicle to the leasing  company. You are not affected in any way. Contrast this with a financed vehicle where you would take a big hit on the value.

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