Why Do People Lease Cars? (11 Reasons Why)

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Bruce Coleman

Bruce Coleman is a diesel mechanic and car tester with 20 years of experience. He's a member of various vintage car clubs, and he loves restoring old motorbikes.

When it comes to getting a new (or used) car, there are basically two ways to go about it: purchase or lease. Between these two options, people choose to go the leasing route roughly 24% of the time.

Despite being the less common choice, there are a number of reasons why people lease cars, and 11 of the most compelling ones are listed below so keep reading.

Why Do People Lease Cars?

1. Lower Monthly Payments

One of the most common reasons why people lease cars is because they can usually get a lower monthly payment compared to financing a vehicle. 

Generally speaking, lease payments tend to be significantly lower than the amounts paid to a bank or financial institution for purchasing a car outright because at the end of the term the vehicle is returned.

Simply put, for some drivers, leasing is the most affordable option for getting behind the wheel of a car.

2. Less Money Upfront

Another aspect of leasing a vehicle that people find attractive is the lower amount of money that needs to be paid upfront to the dealership in order to drive off the lot in a new car.

In most purchase scenarios, a down payment of 10% to 20% is not uncommon. Depending on the price of the car, this can add up to thousands of dollars that need to be paid to complete the transaction.

But in a leasing situation, the amount of money that needs to be paid upfront can be far less, and in some cases, payment of a transaction fee is all that is required along with the first month’s payment.

3. Less Out-Of-Pocket Maintenance Costs

It is not just the lower upfront and monthly costs that make a car lease an attractive option. Leasing a car can also be advantageous as far as out-of-pocket maintenance and repair costs are concerned. 

Since lease terms are commonly 2 to 4 years in length, they overlap with the warranty protections offered by car manufacturers. To illustrate, here are the warranties typically attached to new cars:

  • Most vehicles come with a comprehensive bumper-to-bumper warranty that runs for the first 3 years or 36,000 miles of a car’s life, whichever comes first
  • There is usually an additional powertrain warranty covering the engine and transmission that lasts for 5 years or 60,000 miles, whichever milestone the vehicle hits first
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While a vehicle is still covered by its warranties, any necessary repairs are normally covered by the dealer. But after a warranty expires, those costs become the responsibility of the car’s owner.

Since a car that is being leased will likely be within its warranty period throughout most, if not all, of the lease term, drivers who want to avoid repair costs as much as possible should consider this option.

4. No Need To Resell

As anyone who has sold their car can attest, the process of selling a vehicle can be a stressful one. There is work involved in getting the word out, meeting with prospective buyers, and the dreaded haggling.

In contrast, when a car lease ends, the vehicle is brought back to the dealership, it undergoes an inspection, there are a few documents to sign, the keys are returned, and the process is done.

For those who are averse to selling something like a vehicle, the relative ease with which a lease is closed out is yet another reason why leasing is appealing.

5. Driving The Latest Models

Some people drive cars to be seen in them and their vehicle is a reflection of their status and accomplishments. 

For such individuals, the make and model of what they drive is a very big deal and so is the model year.

For many drivers, this means taking the wheel of the latest models off of the production line. With the exception of the ultra-wealthy, however, purchasing new cars on a whim is not a reality for most people.

With a short lease term, say two years, for instance, leasing a car can ensure that not only is the latest model year being driven around but that the familiar new car smell remains fresh and strong too.

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6. Lease-To-Own Option

Lease-To-Own Option

Purchasing a car is a big financial commitment and for various reasons, it may not be the best option for someone who is unsure whether a particular vehicle is the right long-term choice.

Leasing a car can serve as an extended test drive, allowing a driver to become familiar and comfortable with the vehicle they are driving and they may decide that they would like to own the vehicle outright.

When lease agreements are prepared and signed at the beginning of the term, most dealerships will include a buyout amount which will allow the leasing party to purchase the car at the end of the lease.

7. Driving A Nicer Car

With a lower monthly payment and less money required upfront, leasing a car can also enable people to drive around in a vehicle that they would not be able to afford were they to purchase it outright.

Whether it is a sleek luxury sedan or a sporty SUV with 

8. Having The Latest Features

For tech-savvy drivers who enjoy staying on top of the latest gadgets to adorn vehicles these days, leasing a car affords the opportunity to enjoy these cutting-edge features while they’re still new.

This also applies to safety features, with newer cars sporting assistive technologies that make driving safer than ever.

With terms ranging from two to four years in length, leasing a new car means that its features represent the latest advancements in driving and comfort.

9. There Are Tax Advantages

Under certain circumstances, for instance, using a car for business purposes, there can be significant tax advantages to leasing a car.

According to the Internal Revenue Service, the business-related portion of lease payments is deductible, meaning that these expenses can offset income and reduce the amount of taxes that a business pays.

10. Protection Against Depreciation

Purchasing a car is essentially acquiring an asset that will hopefully provide years of reliable service.  Parting with a vehicle, however, and finding out how much it will fetch can be cause for worry.

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Over time and through years of use, a car will naturally depreciate and lose value. For an owner, selling a vehicle for less than what was expected or hoped for can be a disappointing experience.

But when a lease term comes to an end, the resale value of the returned vehicle is strictly the dealer’s concern, which makes leasing a car a good way to make yourself immune to the risk of depreciation.

11. Adapting To Changing Lifestyles

As people transition from one stage of their lives to the next, circumstances change, and leasing cars as opposed to purchasing them can help ensure that modes of transportation adapt to changing needs.

For instance, a sleek, sporty sedan may be a fitting ride for a young professional embarking on a promising career path. 

But fast forward a few years with a family and children in the picture and suddenly an SUV may be more appropriate, and before long, that could be traded in for a minivan.

Changing lifestyles can dictate different transportation needs and car leases provide the greatest amount of flexibility to meet new challenges head-on.

To learn more, you can also read our posts on why Arizona vehicle registration is so expensive, why someone put your windshield wipers up, and why motorcyclists point to the ground.


While it is not as common as purchasing a car, a healthy portion of people elect to go the leasing route for any number of reasons.

To sum it up, leasing provides flexibility in car options, minimizes maintenance costs, and eliminates the hassle of reselling a vehicle later on.


  • Bruce Coleman

    Bruce Coleman is a diesel mechanic and car tester with 20 years of experience. He's a member of various vintage car clubs, and he loves restoring old motorbikes.

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