To Lease A Car, You'll Be Faced With Some Pros And Cons. Here Are Some Cons
To lease a car is not for everybody. It might not be ideal for you.
Leasing is unattractive to many people because most people don't understand it. If you like car ownership and would like to drive your car to the ground, leasing is not for you. Instead of buying new car
with a bank loan, you rent or lease the car for 3 or more years then give it back to the leasing company at the end.
Having an automobile lease
is a way to drive more car than you can afford and change cars every 3 years without the hassles of trading in an older car for a new one. It's a simpler way to "have" a car for transportation.
But it's also a perpetual money drain because you keep on making car payments month after month. To buy a car is initially more expensive. There's the down payment during the first year but the monthly payments stop after 4 or 5 years, depending upon the terms of your car loan. After that you gain ownership of the car and save money, as opposed to leasing, as you only have to worry about maintenance.
To lease a car has disadvantages and here they are:
It does not necessarily cost less. Although monthly payments for leased cars are often lower than those for purchased cars, this is not always the case. There are fees a-plenty and you wil not like some of them.
You will not own a leased vehicle, period. The money you spend each month does not go towards buying the car. After the lease, the car goes back to the leasing company.
The mileage restrictions will be burdensome if you fail to plan your driving. If you drive more than 12,000 - 15,000 miles per year, to lease a car is probably not for you. Exceeding your alotted mileage will cost you - usually around 15 cents for every mile over your limit, and 20-25 cents for luxury cars. So, if you go over 5,000 miles on your Lexus , you can expect to pay about $800 to $1,000 at the end of the lease.
You pay for the condition of your car at the end of the lease. End-of-lease terms require you to pay for anything the dealer deems to be "signs of excessive wear and tear." They often nit pick when you bring the car back, finding ways to keep your "refundable security deposit" for excess wear and tear
Lease termination will cost you. Whether you choose to end the lease early or your car is stolen or totaled, or hit by lightning, you will be looking at termination fees. To lease a car can be dangerous to your wallet.
insurance is usually higher when you lease. Leasing companies usually require you to buy minimum insurance policies of $300,000 and that's way more than most people normally buy.
Selling price is usually MSRP and some dealers are good in hiding this from you by diverting your attention to low monthly payments.
Fees during signing (Dealer Acquisition fees or leasing company fees ranging from $500 to $700) and fees at end of lease (disposition fees of around $400)
Some dealers who refuse to itemize your trade-in might end up not crediting you for it. In other words, you will get taken.
Confusing finance Charges. In leasing, the term is called money factor. Because of the way the paperwork is set up, you'll get confused with finance charges. Some dealers might end up charging you a high finance charge even if you have very good credit. Instead, they will have you focused on the supposedly low monthly payments.
To lease a car has advantages and disadvantages. But a car lease