Pros and Cons of Car Leasing

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When finding a car to use, you have various options, including purchasing, rental, and leasing. If you have the money to pay for the car in cash or at least the down payment required, and you want to own the vehicle outright, purchasing is the right choice for you. However, if you will only be using it for a short time, rental is the option. If you don’t have the money for a hefty down payment, but you still want the chance of owning the vehicle, you may go for a lease.

A low down payment is not the only benefit of personal car lease deals. There are more, although it also doesn’t come without any drawbacks. To make sure that you are making the right decision and you are getting your money’s worth, here are the pros and cons of car leasing.

The pros

  • Low to no down payment. As mentioned, the down payment for a car lease is smaller than a car loan. Some companies can even wave the down payment and include it in your monthly payments instead if you find it more convenient.
  • Drive a new car after a few years. Once your lease contract ends, you can choose another car to lease. If you are the type who loves driving new models of vehicles, it’s an excellent option for you.
  • Latest safety and security features. Since you can choose from various new vehicle models each time you lease, you will have access to those with modern safety and security features. Moreover, newer models also usually have improved performance and lower fuel consumption.
  • Lower monthly rates. The monthly payments will be lower too, compared to what you pay for a car loan.
  • Car warranty. New cars are usually still under warranty during their first three years. If you have a three-year lease, then the vehicle will still be covered during the lease period.
  • Option to buy it. If you decide to buy the vehicle at the end of the lease, the price will be based on the depreciated value, so it will not be as expensive.

The cons

  • Early contract termination fee. You will pay an early termination fee if you end the lease before you reach the end date of the contract.
  • Limited mileage. You will have a specific mileage limit when you lease a car. If you go over that, you will incur additional charges. It will not be a concern if you buy the vehicle.
  • Payment for wear and tear. The leasing company will also check the car’s condition. You will also be charged for excessive wear and tear, so you need to ensure proper care and maintenance during the time that it’s with you.

You don’t own it. Although you are using the car every day, it is still not yours until you decide to buy it when the lease contract ends.

Consider the pros and cons of leasing a car to determine if it’s the best choice for you. If you proceed with a lease, compare your options to get the best deal.