In this section, we'll discuss automotive leasing, including how lease programs work, the advantages and disadvantages of leasing a vehicle, how to calculate monthly payments and a variety of options that are available to you at the end of your lease, as well as tips to help you avoid paying unnecessary penalties and costs when your vehicle lease ends.
Simply put, leasing allows consumers to drive a more expensive vehicle for less money each month than if they financed (or secured a standard automotive loan) for that same vehicle.
In some respects, leasing is similar to financing because you make monthly payments, including interest, over a specified period of time. Popular lease terms usually last three, four and sometimes five years. When it comes to high-end vehicles, such as luxury cars, a lease term can be as long as five years or 60 months. In most cases, you can specify exactly how long you want your lease term to be. However, at the end of the term, instead of owning the vehicle outright as you would with standard automotive financing, you can simply turn in the vehicle and begin a new lease on a new vehicle. As a result, you're able to drive a new car every few years.