Credit: Monkey Business Images/Shutterstock.com
I explain on the air that as we age, our mobility becomes more and more important and, frankly, precious. For many seniors, they have never given much thought to leasing a vehicle; many grew up in a time that this just wasn't done. However, it should be considered, along with the purchase option. It is wise to look at both in-depth to make the right decision.
Here are some of the reasons I think senior citizens should look at leasing their next vehicle:
1. Lower monthly payments.There is no doubt if you are not in a position to pay cash for your next car, a lease will cost you less per month. Depending on the vehicle and the incentives, at times the lease payment will be substantially lower.
2. Keep your cash.Just about any lease can be done with little or no money down. While certificates of deposit and other interest-bearing accounts are not paying huge dividends, for some people it gives them peace of mind to know where their money is.
3. More options.With leasing, if the vehicle you chose turns out not to be right for you, it is easier and quicker to get out of a lease than a long-term finance contract. I've seen many cases of people suddenly needing something very different, like a mobility van and, again, getting out of a lease will be easier. If leasing just did not work for you, you can purchase your lease car at any time.
4. Lower out of pocket expenses.For most people who lease, over the term of a lease, you will only be out the lease payment, gasoline, insurance, and very minor things like a few oil changes and tire rotations. Most won't even need to buy a set of tires. Your leased vehicle will be under warranty for the entire time you have it, and some automakers even cover the cost of maintenance.
5. Having the latest features.Cars are changing quickly and there is a race to see which automaker can perfect new safety features and creature comforts. If you get on a lease cycle, meaning you lease again and again, you'll almost always have a safer car than the one before. Vehicles today often have power lift gates and emergency stopping, will keep you in your lane, and warn you when someone is in your blind spot.
6. Making it easier for heirs.Nobody wants to think about being gone, but none of us is immortal. Should the end come with a purchase, especially early in a normal finance contract, unless a lot of money was put down, the balance owed will be greater than the value of the vehicle, leaving the estate or the surviving spouse liable for the deficit. As we already discussed, it is easier to get out of a short-term lease than a long-term finance contract.
A few other things to keep in mind.Don't go over 36-39 months on a lease or you will eliminate the reason for leasing in the first place. Also, lease directly from a Car Pro Certified dealer, not a third-party lease company, you'll save money.
Click here for my FAQ page for more guidance on leasing.
January 06, 2021