Leasing a car comes with a laundry list of pros and cons, and deciding on whether to lease or finance can be daunting. While it’s true that leasing means that much of the upkeep of owning a car is now shifted to the dealership instead of the owner, a person who buys a vehicle outright does have something to show for all their payments at the end of their financing: they now own a car outright.
Here are some of the advantages as well as the disadvantages to leasing a car:
It’s more cost-effective: A monthly lease payment is lower than that of a monthly car payment, meaning more money in your pocket month-to-month. Also, when you buy a car, you’re often required to put some money down, whereas no upfront funds are needed to lease.
Repairs are not your problem: If something goes wrong with your leased car (for the most part), you just need to bring it to the manufacturer. However, when you own a car, any and all maintenance that comes up is your responsibility.
You’re always driving new(er) cars: With a lease, you’re normally never driving a car that is more than five to seven years old (the maximum lease duration at most dealerships). That means you’re always behind the wheel of a newer model. A lease also allows you to drive a nicer car for less money, so if you’re a professional and have certain “appearances to maintain,” this could be a good option. Plus, in some instances, you can write off your lease as a business expense.
The payments: With a lease, you will always have a monthly payment to make. However, when you buy a car, once those payments are done and the car has been paid for in full, you now own the car outright without any monthly costs (until possible repairs arise).
The upkeep: At the end of your lease cycle you need to return the car in good condition or you may face penalty charges. So, in the end, wear and tear is on you.
You’re locked in: When you sign a lease, you’re locked into a certain time period, and in order to change those conditions, you will have to pay penalties.
You can’t make any alterations: With a leased car, you won’t be allowed to customize your vehicle. You’ll even have to check with your dealership when it comes to certain additions, such an automatic car starter, to ensure that you’re permitted to install this.
You have predetermined mileage allowances: When you lease a car, you choose a mileage package (normally 21,000-24,000 km), and if you go over that year to year, you will have to pay a certain amount of money per kilometre that you go over your limit.
In the end, the decision to lease is really about financial situation and lifestyle. Make your own pros and cons list to see what arrangement works best for you.