Summary: Renting and leasing assets allows people to have more spendable currency than buying does. With jobs becoming more competitive and paychecks decreasing in amount, millenials have opted for the short term commitments over the massive purchases.
As costs of living go up and job hunting continuously becomes more competitive, younger generations are becoming less likely to buy bigger assets like houses and cars. Instead, they prefer to lease or rent these items to keep their budgets more flexible.
Short Term, Budget Friendly Commitments
Renting and leasing allows people to be committed to that asset for a shorter period of time, as opposed to making a purchase. Renting can be done on a month to month basis, whereas leases typically tie you in for at least one year. Either way, the agreement is much shorter in term than buying would be.
You will also likely make smaller monthly payments when you lease, thus allowing you to have more spendable currency for luxury items and the like.
For example, if you lease a car, you can likely return it and begin a new lease after one or two years. Then you will be driving the latest model with less mileage on it. When you travel, or if you only need a car every once in a while, you can rent cars on a day by day based rate, and not worry about having to maintain a car when you do not need it. Buying, on the other hand, commits you for at least five to ten years, so you can complete making the payments and get the most out of your purchase.
Though many people dream about owning their perfect house or the coolest car, millenials have opted to lease or rent these assets because it allows them to be more flexible with their money, which has become more tight as jobs have gotten more competitive and lower in pay.
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