Tuesday, May 29, 2012

Advantages And Disadvantages Of Leasing A Car

Leasing a car is a very common practice these days as it allows you to get a new one at a low monthly payment. Then after your lease is up you can buy it or pick up another new car lease. There are advantage and disadvantages to leasing cars though and you should make sure you know the pros and cons before you sign on the dotted line.

The biggest advantage of leasing is that you don't need a down payment or a very low one. No need to save a couple thousand dollars to get a car, just pay the monthly payments! There are also no maintenance worries because the vehicle is brand new. Just keep up the maintenance such as the correct gas for the auto, get the oil changed and that should be it. If anything does break down or go wrong, just take it back to the dealership. They own the vehicle and will fix the problems.

Another big advantage is that you're driving a late model new car every few years. You can keep up with the Jones' in style by leasing a car. If you need a late model car for business reasons such as a salesperson, or insurance agent then leasing makes financial sense. You won't take that huge hit driving the car off the lot because you don't own it! The last reason leasing is advantageous is that you can get more car for your buck. You can drive a higher priced car than you would be able to afford if you were buying the car. The car lease payment will always be lower than actually buying the car.

There are some disadvantages with leasing a vehicle though. The main one is that you will always have a payment. If you bought it new, you'd eventually pay it off after a few years and not have a few hundred dollars going to pay the car. But with leasing a car, you have a monthly payment that doesn't go anywhere. You don't own the car at the end of a lease and have to buy it or lease another car. Instead of paying for a car payment for five years, and then owning the car with no payment and still driving the car for another five years, with leasing you'd be making a car payment every month of those ten years.

With leasing, you're basically renting it and with renting comes the mileage and damage restrictions. You can only drive so many miles a year on a leased auto for free. After that you have to pay quite high for every mile over that limit. Damage to the auto such as not keeping the vehicle up to dealership standards incurs some pretty heavy penalties also.

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