The trend of leasing a vehicle is becoming more and more common. Once used primarily for luxury cars only, leasing has since spread to small SUVs, compacts and even pick up trucks, allowing you more options and less commitment when deciding on your next car. Leasing a vehicle has always been the alternative to buying, but is it right for you? Here is a look at the pros and cons of leasing a vehicle and what to consider before heading to the dealership.
Pros of Leasing a Vehicle
At fist glance, leasing can seem more appealing than buying. Monthly payments are usually lower because you’re not paying the principal for buying the car. Instead, you’re borrowing and repaying the amount that the car depreciates in the time you have it, plus finance charges.
Here are the major advantages of leasing a vehicle:
- • You drive the car during its most hassle-free years.
- • You can drive a higher-priced, better-equipped vehicle than you might otherwise be able to afford.
- • You’re always driving a late-model vehicle, that is often still covered by the manufacturer’s warranty. Many warranties typically include free oil changes and other scheduled maintenance.
- • You don’t have to worry about the car’s trade-in value or trying of selling it when it’s time for your next car.
- • At the end of the lease you simply drop off the car at the dealer.
Cons of Leasing a Vehicle
While leasing does offer several perks, including lower monthly payments. It may not be right for every driver.
Here are the disadvantages to consider when leasing a vehicle:
- • In the end, leasing usually costs you more than an equivalent loan, if only because you are always driving a rapidly depreciating car.
- • Lease contracts specify a limited number of miles. Exceeding that limit will hit you with extra fees per mile you go over. Those fees can range from 10 to 50 cents for every additional mile. Unfortunately, you don’t get a credit for unused miles.
- • If you lease one car after another, you will always be making monthly car payments. By contrast, the longer you keep a vehicle after buying and paying off a loan, the more value you get out of it. In the long run, the cheapest way to drive is to buy a car and keep it until it gives out.
- • If you don’t maintain the vehicle in good condition, you’ll have to pay excess wear-and-tear charges when you turn it in. Damages such as parking lot dents and dings or spilled coffee stains will leave you paying extra.
- • If you need to end the lease before it expires, you may be stuck with thousands of dollars in early termination fees and penalties all due at once.
- • You cannot upgrade the lease vehicle to your liking, as it needs to be returned to the dealership as it left.
To Lease or Not to Lease?
While leasing a vehicle isn’t right for every driver, it does offer a number of benefits for those who want a relatively hassle-free new car every few years. However, there are a number of cons to consider if you do lease. It’s difficult to make a fair comparison between a traditional loan and the standard three-year lease. If your goal is to have both, low monthly payments and drive a new vehicle every few years, then leasing is probably worth the consideration. Be sure, however, that you can live with all of the limitations on mileage, wear and tear, and the other terms of leasing a vehicle before you sign the contract.
Whether you decide to buy or lease your next car, don’t leave it unprotected! Just call us today at 724-929-2300 for a free quote before you head to the dealership! We’ll do the comparing for you with all the major insurers to get you the best price possible on the coverages that are important to you. You’ll never be stuck paying for coverages that you don’t need because we never sell a one size fits most policy! Have you ever leased? How was the experience? Tell us in the comments!