Hidden Costs of Leasing

The commercials on television might lure you into the dealership inquiring about the latest leasing program for that amazing car you just have to have. It won’t take long for the smoke to clear and for you to realize the leasing options aren’t as appealing as they seemed on TV. But, it’s still likely that leasing will save you money on a monthly payment. It will mean that you’re always driving a new car if you continue leasing. And, it will mean that all maintenance and any repairs will be covered by the dealership from which you leased.

While there are many positive aspects about leasing, more of which you can read about on websites like Cars.com, there are downsides too that you really should consider before taking the temporary plunge. Because leasing translates to borrowing something else’s property, in this case the dealership’s, you will never build up any equity in the leased vehicle even though you make timely payments on the car just as you would had you purchased it. This means you won’t be able to trade it in against the purchase of a new vehicle, unless it’s another lease, and it means you will never own the car. Some people don’t mind this in exchange for always driving something new, and if you’re one of those people then maybe leasing is for you.

Something else you should consider when hammering out the lease paperwork with the dealership is the mileage requirements that your lease will place on your driving. Most leases allow for 12,000 or 15,000 miles per year. The higher the number, the more you’ll pay monthly for the lease. If the lease lasts for three years, and you’ve exceeded 36,000 or 45,000 miles on the vehicle, you’ll have to pay for every single mile you went over. If you’re a road warrior, a road trip lover, or even a soccer mom that spends most of the week in the car shuttling the kids to and fro, these mileage limitations, and the potential cost at the end of a lease, could end up being a nightmare.

You should also know that you will have to pay a fee for the dealership to take the car back at the end of the lease even though it’s technically theirs anyway. It usually runs a few hundred dollars, but might be not be something you care to do as the lease comes to an end. The dealership will also send an inspector out to look over the vehicle carefully and report on its condition. You will pay for every tiny chip on the bumper, every dent in the door from a driver parked next to you, and every tiny scratch or knick will be accounted for and itemized on the final report. The money you owe the dealership for wear and tear that they deem beyond normal could be exorbitant depending on the shape the vehicle is in, and could leave you with a pretty big bill to pay at the end of the lease. Leasing isn’t for everyone, and some people would never buy since their preference for leasing is so strong.

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