Leasing a vehicle can be a great option for anyone in the market for a new car. A lease offers low up-front costs, but sacrifices long-term ownership. Many people who choose to lease a car never go back to traditional buying after their first lease. Leasing is a good way to always have the latest and greatest in automotive luxury and tech. However, many consumers are in the market for shorter lease terms. In some cases they want to lease a car for a year or less.
Here’s a quick rundown of everything you need to know about leasing a car for less than a year.
Leasing vs. Buying
First and foremost, let’s go over the basics of leasing vs. buying. When you purchase a vehicle, you are responsible for paying off the total cost of the vehicle plus interest. After you pay off the vehicle, it’s yours to keep. Most loan terms last 60 to 72 months. You’ll have to consider how much your car has depreciated in value in that time. After 72 months, your $24,000 vehicle may be worth less than $10,000.
Leasing shields the consumer from depreciation because you return the vehicle to the dealership at the end of your lease. After you pay any end-of-lease costs, you’re free to begin another lease or walk away. Also, leasing is almost always less expensive in the short term. Your monthly costs will be significantly lower than buying, and you won’t have to make a significant down payment. When leasing, you’ll be limited to only driving 12,000 to 15,000 miles per year, but that number can be negotiated.
Short Term Leasing
Let’s say you want to lease a vehicle for a year or less. While it’s possible, it’ll be hard to find a dealership that will approve the lease. Most of the vehicle’s value depreciates in the first year of driving. This makes it hard for dealerships to get the most value out of a lease. In short, you’re going to be paying a lot more per month for a short term lease than a long term lease. You can try to negotiate terms, but there’s only so much a sales manager can do to make a deal for you.
A short term lease makes sense if you’re traveling somewhere for a year or less on business. The lease will be considered a business expense, so you won’t be saddled with the high cost of a short term lease. Also, you won’t have to make any long-term commitments that outlast your job opportunity.
Some people get a short term lease if they want to test a vehicle before buying it. At the end of every lease, you’ll have the option to purchase your car at a negotiable price. It’s in the dealerships best interest to sell you the car after the lease is up.
First and foremost, the monthly cost will be significantly higher than a 2 or 3 year lease. This is due to depreciation. The dealership has to cover the car’s depreciation in value while also turning a profit. A vehicle’s value depreciates more in the first year of ownership than at any other time. This depreciation is even more severe in luxury and sports cars.
Leases come with a variety of fees and extra costs. Usually these costs are spread out over several years. However, you’ll wind up paying the same fees for a shorter term of ownership, making them seem much greater.
The Other Options
While leasing and buying may seem like the only viable options, there are other ways to get a short term lease without breaking the bank. Consider a long-term rental. Unlike a lease, there’s no down payment, you won’t have to register the vehicle, and all the maintenance is taken car of by the rental company. This is also a good option if you don’t have the best credit. You won’t have the same options as leasing through a dealership, but the significantly reduced cost more than makes up for it.
Trying to Lease a Car for Less Than 1 Year?
Do you need a car, but don’t want to buy or lease? At Value Rental Car, we offer flexible long-term and short-term car rentals at competitive prices. We also offer cash car rentals and rentals for drivers under 21. Take advantage of our complimentary LAX pickup and drop-off service to skip the lines at the airport and get on the road today.