If you’re under the age of 35, you might have considered leasing a vehicle instead of purchasing one. You are not alone. In a recent article posted on Salon.com, writer Angelo Young discussed an issue many millennials have: they need a vehicle because they just can’t rely on public transportation or car sharing, but can’t afford to purchase one either outright or by being tied down to a long-term financial commitment. Leasing could potentially solve many of these problems for millennials and the numbers show that they are responding to it.
According to automobile data released for 2016 by Edmunds.com, nearly 34% of millennials lease their automobiles rather than purchase them. This is much higher than other age groups in the US.
First and foremost, many millennials simply can’t afford the costs of ownership. There is the initial down payment, which is usually more than the upfront fee to lease. In most cases, lenders will want to see 20% down before they agree to finance your purchase especially if you have little credit history. Monthly payments tend to be cheaper as well for leases. It isn’t difficult to lease a new vehicle for $150 or less in many parts of the country. Finally, lessees don’t have to worry about the costs of repairs beyond regular maintenance costs. In the long run, they may be able to save when they lease.
In addition to that, millennials like to take advantage of the latest technologies. This tech-savvy group normally doesn’t want to hold on to automobiles for ten or more years. Many would rather upgrade much sooner than that. Leasing allows this in a much easier fashion since the car is returned in 3 or 5 years without additional obligations. In addition to that, leasing represents a much shorter and less restricted time commitment. If an individual wants to opt out of a contract or doesn’t want to make payments for a long period of time, leasing offers many more options.
So What Should You Do If You Want to Lease?
In many cases, leasing might make a lot of sense. In other cases, it might not. You’ll pay more over the course of a decade if you hop from lease contract to lease contract, but your ultimate decision may rely on your own personal preferences and comfort level with your finances. In addition to that, remember that you are responsible for regular fees, including registration whether you do it through the DMV or a premium service like eTags.com. If you do decide that you want to lease, look for the myriad of promotions out there. As more people lease, automakers will continue to offer savings to bring people to the lot.