Why Do Customers Choose Leasing versus Financing?

For someone who likes a new car every few years, leasing can be a tremendous way to get their new vehicle. Having been around now for a while, car buyers are a lot savvier to what the potential benefits and downsides are and for many today leasing is a foregone conclusion.  If they want more car than they can afford to purchase, or if they plan to change vehicles every 2 or 3 years, leasing offers a lot of benefits that can make it an attractive alternative to purchasing.

Leasing is similar to renting an apartment as it gives you the right to drive the car, but with certain stipulations.   You can’t alter its appearance or repaint it. And it’s probably good to keep the dogs outside as you will have to pay for any damage or loss of value that occurs because of them.   Leasing means your car will probably be under warranty for the whole term of the lease.  That can mean a lot to someone who doesn’t like to pay for mechanical problems should they come up.  

Another attraction for customers is that leasing typically requires less of a monthly payment than traditional financing.  As for tax incentives, the cost of leasing can be deducted from your taxes if you use your car for business more than 50 percent of the time.  It is true that there are certain tax deductions for financing a business vehicle, but they are not as great as those of a leased vehicle.  For instance, you can deduct a certain percentage of your lease payments no matter how high those payments are.  Doing the same thing on a financed car has more limitations. You do have to carry a higher level of insurance on a leased car, but that is not necessarily prohibitive except for younger drivers who tend not to carry as much coverage as leasing requires.

So when your auto sales customers are deciding whether to lease or own, now you can present them with several reasons why they should do one or the other. Depending on the customer, you may find that leasing is a better option, while other customers will simply prefer to own their vehicle. Either way, knowing the pros and cons of both options will ultimately help you close more sales. 

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