Whether or not you think leasing is a good idea is subjective. For some people, it’s the perfect way to get a brand new car without spending tens of thousands of dollars over a few years. For others, vehicle leasing just doesn’t fit their everyday needs. There are pros and cons to car leasing, and if you’re on the fence about trying it, check out the most common reasons why or why not leasing is a good move.
4 Reasons Why Leasing a Car is Smart
- You get a new vehicle every few years – Leases are short, typically lasting 12 to 36 months, and you can lease the latest and greatest models each time.
- Your monthly payments are lower – The monthly payment on a leased car is usually much cheaper than if that vehicle was financed.
- You’re protected by a warranty – Manufacturer-backed warranties typically cover the entire lease term.
- You have options at the end of the lease – If you loved the car, you can choose to buy it. You also can lease another vehicle, or simply walk away.
Ideally, you should be able to lease a car if you have good credit, a stable income, and an average daily long commute. Leases come with mileage limits, and although you can offset additional mileage by paying for extra miles up-front, you should make sure that if you don’t pay for additional miles, that the mileage limit isn’t going to cost you in the end.
4 Reasons Not to Lease a Car
- You have a mileage limit – Leases come with mileage limits, and if you go over them you have to pay per mile, typically 25 cents.
- You have to maintain the vehicle – Normal wear and tear is fine, but if the car has some serious cosmetic damage, you need to get it fixed before turning the vehicle in. If the car has excess wear and tear, you’re going to end up paying to have it fixed.
- You may need to purchase GAP insurance – You should have GAP insurance if you plan on leasing. While most lease deals come with it, not all do.
- You don’t save money by making a down payment – Making a down payment simply pre-pays the lease instead of saving you money on interest costs.
Leases come with limitations. You also have to take care of any issues to avoid excess wear and tear fees. This means holding to a regular maintenance schedule and fixing things as needed.
The Bottom Line
While it may sound like a great idea to get a brand new vehicle every few years, leasing is typically reserved for consumers with great credit. The possibility of being able to lease with bad credit is slim, but you’d be surprised by what taking on a car loan can do for you.
If you need help getting auto financing, but don’t know where to turn, let Auto Credit Express help. We work with dealers all across the US in order to make it easier for credit-challenged consumers to find financing. Let us connect you with a special finance dealership near you for free. Simply submit our online auto loan request form to get the process started.