Why You Shouldn’t Lease a Car
Why You Shouldn’t Lease a Car
Here are five reasons why you shouldn’t lease a car! Most people when they are looking at a new car often look into the option of leasing. Leasing typically gives you a lower payment compared to buying a new vehicle. Leasing a car often is like renting the car, you borrow it for a certain period of time usually a few years and give them monthly payments then you return the vehicle. This option can build your credit history . The unfortunate thing is the extra costs that aren’t discussed. Here are few reasons I will never lease a car again.
The Payments –
So yes, my payments might have been lower with leasing considering I’m only paying $314 a month. However, I’m paying that monthly payment for a period of two years equaling a total of $7,536. I could have paid off a cheap little used car over the past two years or at least paid off most of the vehicle. Now, I’m not knocking this completely I understand that sometimes you have no other option and need a car right then and there. However, if you’re going to make this decision I’d choose to do otherwise.
Insurance is sky-rocket on leased vehicles! I realized full coverage was going to be high. However, some of my policy was different as oppose to purchasing a vehicle. The insurance company worked on my policy as much as they could to get me down to a $286 a month payment. This wasn’t the only thing that jumped up for me, registration renewal was double the amount!
Mileage is a factor in the leasing program. Mileage is tracked per month, with my contract I got 1,000 miles a month to drive. Now that’s decent if they live close to work. On Saturdays I drive around town to yard sale so I don’t have to shop retail. Also, my trip from work a month back and forth can rack up almost 500 miles by itself. Don’t forget trips to the store, picking the kids up from daycare, and other misc trips. Now let’s say you want to travel somewhere within those two years that’s a little out of your range. If you decide to go over your limit you are not paying per mile. Some companies will charge $0.15 per mile after the limit.
Return Cost –
Returning the vehicle can rack up a hefty cost if you’re not careful. Remember it’s just like renting a car! So that means upon return a sales agent or service will do a full walk around and inspection on your lease to make sure you haven’t damage anything. This can sometimes cost you a pretty penny.
Breaking Contract –
Half way through my lease I wanted to get out and buy a car while I had the money. Little did I know that’s not how it worked. A lease is a contract and just like any contract there are ways out. With a lease you have the option to purchase afterward or pay the remaining balance off after you return the vehicle. Unfortunately in my case it didn’t make sense to continue making a payment and drive a car I bought out right. I’d rather drive the lease that I’m making a payment on.
What should You do?
If you look at this from a financial standing point it makes more sense to buy than lease. Purchase a reliable car that you can afford with a loan of no more than 48 months. Make a down payment of at least 10 percent of the purchase price in cash or trade-in. That will keep the costs down and reduce the likelihood you’ll come up short if you have to sell the car early or if the vehicle is totaled or stolen while you’re still paying off the loan.