What are the Benefits and Downsides of Leasing a Car?
This is part of our mini-series helping international students understand every aspect of having a car in the United States as they pursue their studies. For information regarding international student auto loans, please follow this link.
If you are an international studying abroad in the United States, then you more than likely have noticed how common transportation by car is among the United States population. In many areas of the United States, car transportation is the most common method of transportation. Other countries may utilize other methods, such as a public transport or even bicycles. If you are studying abroad in the United States, you may have noticed this and decided that you want a car.
If you decide that you would like a car while studying abroad in the United States, the first thing that you should do is determine whether or not you will be needing an international student car loan. The next step is then determining if you want to buy or lease a car. We have previously wrote about buying versus leasing. Below, we will outline the potential benefits and the downsides of leasing a car.
Benefits to Leasing a Car
If you do not like long term commitments, or do not want to commit to buying a car, then leasing may be an interesting route for you to consider. When an international student leases a car, you do not pay the entire price, as an international student would when buying a car. Essentially, international students who lease a car pay a monthly fee for the duration of the lease. In turn, since the lease is for a set period of time and since the payments do not go towards equity of the car, usually the monthly payments on leased cars are lower than the monthly payments an international student would make if they financed a car.
Another benefit of an international student leasing a car is that you do not need to worry about selling or trading in the car. Once the lease is over, you can simply drop off the car at the dealership. Most leases on average last for a term of three years. That tem amount usually covers the basic warranty on most cars, so the leased car you drive may likely be under warranty. Finally, another benefit to an international student leasing a car is that it becomes more affordable to have newer and better cars, and there is no long-term commitment. Essentially, every three years you can have a new car!
Downsides to Leasing a Car
Perhaps the biggest downside to leasing a car is that you do not own it – the dealership does. As a result, they dictate what you can and cannot do with the leased car. The dealership puts restrictions on the car an international student leases.
One of the most common restrictions on a leased car deal is mileage restrictions. Basically, the dealer gives you a certain amount of miles you can drive per year. Then, at the end of the lease, if the miles on the car are more than the mileage limit the dealer put in the contract, you may have to pay a steep overage fee. As a result, be sure to know or at least have a good estimate of how much you will drive the car before entering into an international student car lease.
Finally, maybe the biggest downside to leasing a car is that you need very good credit in order to do so. Many international students do not have good credit, so leasing a car may be difficult. It may perhaps be easier to secure an international student car loan then a lease. If you are planning on leasing a car, please make sure to communicate with the potential dealer first to see what kind of credit they require.
At Nomad Credit, we can help you find potential auto loan options that do not require credit history or a social security number as well as answer any questions or concerns you may have while studying abroad in the United States.
For more information, visit Nomad Credit. In addition to potential international student auto loans we will help you find potential options for international student education loans or study loans as well.
If you have any questions, send an email to email@example.com and we will happily help!