So, you’re in the market for a new Ford car, truck, or SUV, but you’re not sure whether to lease it or finance it. We’ve talked a bit about the basics of financing vs. leasing, but some shoppers still don’t understand the finer points, and many don’t even consider it as an option. So, we figured we’d go a bit deeper and fully explain the pros and cons of leasing, as well as how to find the best Ford lease offers near Davenport, IA. Let’s get into it.
Basics of Leasing a Car
First, let’s take a second to talk about what a car lease entails. Basically, it’s similar to renting a home—when you lease a car, you can think of it as a long-term rental, typically lasting two to three years.
Your monthly payments are determined by the expected drop in value over the lease term. For instance, if a car has a price tag of $20,000 at the beginning of the lease, and it’s expected to be worth $15,000 by the end of the lease, you’ll pay a total of $5,000 over the course of the lease to cover the depreciation. For the average 36-month term, that works out to about $139 a month. The math is slightly more complicated with varying interest rates and fees associated with leasing, but that’s the gist.
After your lease ends, you simply return the car to the dealership, and the deal is done. You can choose to lease another car, finance your next vehicle, or, in some cases, you may even be able to buy your lease out (more on that in a moment).
Benefits of Leasing a Car
- Lower monthly payments: This is generally seen as one of the major upsides of leasing a car. In our simplified example above, the customer would only be paying $139 a month. This is because lease payments are calculated based on the expected loss of value over a couple of years, i.e., its depreciation, instead of financing the vehicle’s entire value.
- Drive a new vehicle for less money: Often, dealerships don’t offer leases on used cars; at most, a vehicle may have a few thousand on the odometer, but it’ll essentially be brand-new. This allows you to drive a much nicer car for a lower monthly payment compared to traditional financing.
- Enjoy the newest features: Because you’ll be driving a new car, you’ll be able to enjoy the latest infotainment, comfort, and safety features. The lower payment can also allow you to budget for a nicer trim, which gives you even more opportunity to spring for the high-end amenities.
- New car warranty coverage: Leases are generally covered under the new car warranty, which means if anything goes wrong, it’ll likely be taken care of at no cost. It may also include additional perks like roadside assistance, trial subscriptions, and complimentary maintenance.
- No hassle: You’ll never have to worry about selling the car or negotiating its trade-in value because the amount is set up front. When the lease ends, just drop it off at the dealership.
- Lease-end buyout potential: Many folks don’t like the idea of leasing because of the lack of ownership, but that’s not always the case. You may have the option to finance the car at the end of the lease, and this can be especially advantageous if the lessee overestimated the car’s rate of depreciation, which could allow you to buy it for under market value.
- Tax breaks for businesses: Let’s say you have a business, and you need a new Ford truck. Leasing can give you significant tax advantages compared to financing.
Downsides of Leasing a Car
- Lack of ownership: If your lease agreement doesn’t have a lease-end buyout option, you’ll never truly own the vehicle, which means you don’t build any equity.
- Mileage and condition restrictions: A lease agreement will usually have some sort of stipulation on how many miles you can drive over the course of the lease, and this may not work for people who drive more than average. You’ll also need to return the car with minimal wear and tear. Break either of these rules, and you’ll have to pay extra.
- A binding contract: Lease agreements tend to be pretty airtight, which means you may not have an option to end the lease early. If you do need to terminate it prematurely, you may have to pay a hefty sum.
Find the Best Ford Lease Deals near Davenport, IA
Hopefully, this quick leasing guide will help you make an informed decision on the best option for you, but if you still have questions about the process of leasing a new Ford truck, our team at Ed Morse Ford Muscatine is at your beck and call with expert guidance. Simply speak with the team in our finance department, and we’ll help you determine whether a lease is the right choice for your next new car.
Contact our team online or call us at 563-272-0815 to learn about our new vehicle specials and exclusive Ford lease deals so you can enjoy the lowest monthly payment possible.
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