Personal car leasing is growing in popularity. It is a suitable alternative to purchasing a vehicle for many people who don’t want a long-term commitment. They simply want to use a car for a specific time period and then be done with it. There is nothing wrong with that, and many people do it all the time.
Is personal car leasing right for you? Well, it all depends on how often you’re going to drive and what you need a car for. Let’s examine the advantages and disadvantages of personal car leasing. Then perhaps you can get a better idea of whether it is a good option for you.
1) Try Out New Vehicles
The biggest advantage of personal car leasing is that you get to try out a wider selection of newer vehicles. This is something you don’t get to do with car purchases because you end up with the same car for 5 or more years. Car leasing lets you try out the newest vehicles within a shorter timeframe without having to purchase any of them.
2) No Repair Worries
Since you’re not the owner of the vehicle under a lease, you’re not under any obligation to make expensive repairs. That is why you’ll usually get a warranty with the leased vehicle. The specific terms of the leasing contract will state if there are any exceptions, but usually you won’t need to worry about them.
3) No Big Upfront Costs
A lot of people like to lease vehicles because they don’t need to make any big upfront payments, such as down payments or deposits. If you’re someone on a limited budget, but you have good credit history, then you can find a huge advantage in leasing a new vehicle without incurring much expense or responsibility.
4) Not Affected by Deprecation
Car purchases are not really investments because cars depreciate and lose value every day. Immediately after you drive your vehicle off the car lot, it has depreciated and lost value. But if you only lease the vehicle, then depreciation won’t even matter to you because you don’t own the vehicle. That is something the leasing company and car dealership will need to worry about.
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1) No Ownership Advantage
When you make payments to the leasing company, you’re not contributing toward purchasing ownership of the vehicle. That means all those payments will be for nothing in terms of ownership. You are merely renting the vehicle up until the point your lease expires.
2) Mileage Limitations
Leasing a car requires you to monitor your mileage carefully because you’re supposed to stay under a certain amount of mileage within the time period of the contract. If you go over that mileage, then you’ll be penalized at the end based on how many extra miles you added onto the odometer. If you’re someone who does a lot of driving, then you may end up paying extra money.
3) Expensive Insurance Rates
Car insurance companies do not offer affordable coverage for leased vehicles. You can expect to pay a much higher insurance premium each month if you lease your vehicle. Then your lower monthly payments on the lease itself won’t matter so much because you’ll be paying all these insurance expenses.
4) Extra Fees
When you return your vehicle to the car dealership, be prepared to pay extra fees. For instance, if you return your vehicle early before the leasing contract expires, then you’ll need to pay an early termination fee. Also, the auto technician will evaluate the vehicle and look for any signs of scuffs or damage. These extra flaws may require you to pay extra money, according to what is written in the terms of the lease.