The offers can be extremely enticing. Just a few thousand dollars down, and then one or two hundred per month for two or three years, and presto! You get a brand, spanking new car! Leasing a new vehicle seems (if the car commercials are to be believed) like a real no-brainer of a deal, but is it really? The old saying, “If it’s too good to be true, than chances are it probably is too good to be true” may be more than appropriately fitting when it comes to auto leases, considering how often there’s hidden costs involved.
Auto manufacturers and of course, leasing companies, love when consumers lease rather than purchase their vehicles. For one, you don’t build any equity in your car or truck while you’re paying for it. That means that when you turn the car in at the end of the lease, you’ll be right back at square one, needing a down payment if you decide to buy your next car, or a security deposit if you decide to lease. Another point of contention is the extraordinary number of ways that the company can nickel and dime you to death once the lease has terminated. While it doesn’t always happen, and certainly won’t for everyone, there are a thousand ways that an appraiser (who isn’t impartial, mind you) can devalue a vehicle that isn’t in pristine order when it’s returned. That little speck of coffee on the seat? That might just cost you the full interior detailing. It depends on the company you’re working with.
Leasing your next car may also cost you a pretty penny when it comes to insurance, though. It may be necessary for you to carry more insurance than you already do. The leasing company, after all, wants to protect its investment, since they’ll be taking possession of the vehicle later on, and will want to be able to sell it on the used market for as much as they can get for it. That means they’re going to want any repairs that have to be done to the car finished by a qualified body shop or mechanical shop, not your uncle Joe doing the work out of his garage.
That being said, there are enough positives to automotive leasing that it has been around for many, many years, and though it has gotten a bad rap for the most part, there are positives that shouldn’t be overlooked. First off, obviously, there’s something to be said for driving a brand-new car off the lot every two or three years. By doing this, you avoid the hassle of paying for major repairs that tend to come your way when you own a car and it has passed the 60k mile mark, or is no longer under warranty.
Additionally, leasing allows you to purchase more car than you might have been able to purchase while still remaining safely within your monthly budget. Since the monthly payments are typically lower for a leased vehicle, you might just be able to upsize without having to take a second job. That can mean getting a more fuel efficient car, a car that actually allows all your kids to sit in the passenger compartment, or just one that won’t make people laugh at you while you’re driving down the street. Is leasing right for you? It might be, but remember that it isn’t for everyone. If you think you might want to own the car at some point, rather than lease, then you might be better off purchasing. At the end of the day, though, the choice really is up to you.