If you’re thinking of leasing a car in the near future, you’re not alone. According to recent Experian data, leasing makes up over 30 percent of all new vehicle financing. Deciding if leasing is right for you comes down to whether or not the pros outweigh the cons. Here are some key points you should consider before leasing a car.
The Benefits of Leasing a Car
Leasing is a great option for someone who wants the latest technology, or drive a brand of vehicle they’ve never had before. Leases also give you an opportunity to drive a well-equipped, high-priced car that you might not be able to otherwise afford. And, when the term is up, you can purchase the vehicle, or simply turn in the car and walk away.
Here are some of the biggest benefits to leasing:
- No long-term commitment – Lease terms are typically only two or three years, which means you’ll always be driving a newer vehicle.
- Only pay for what you use – This goes hand-in-hand with the short term of a lease. You only pay for the portion of the car you use, based on depreciation. Your monthly payment is usually lower as well.
- No large down payment requirement – This can help allow a qualified lessees the ability to get a vehicle without coming up with a lot of cash upfront.
- Warranty coverage – Leased cars are usually under warranty for most, if not all, of the time you have them. In some cases, this can save you a great deal in regular maintenance charges.
As you can see there are a number of advantages to leasing a vehicle. However, whether those are enough to make leasing worthwhile depends on how they stack up against the potential downsides.
Is it Worth it to Lease a Car?
Here are a few reasons to think twice before diving into a lease car:
- Condition upon return – Leased vehicles need to be returned in good condition. This means keeping up with regular maintenance and repairing anything above “normal” wear and tear before turn in.
- Mileage limitations – Leases come with a built-in mileage limit. If a lease is turned in over mileage, it can cost you 25 cents or more per mile for that overage, which can add up fast.
- No refund for overage – It’s possible to purchase more miles up front for a lower price (usually around 15 cents per mile), but if you don’t use all the miles you purchased, you won’t be getting any cash back.
- Difficult to walk away early – Often, leases require you to pay hefty early termination fees if you choose not to complete your lease term. Sometimes, these fees can equal the remainder of your lease payments.
- Leasing indefinitely – If you don’t purchase the car or walk away in the end, and instead choose to lease again, being in a never-ending cycle of lease payments can get expensive.
Deciding if Leasing is For You
Ultimately, it’s up to you to determine if it’s worthwhile to lease or to buy. Keep in mind that leasing isn’t something that’s even available to everyone. If you’re struggling with credit issues, for example, you may find it very difficult to qualify for a lease. Typically, leases are reserved for people with good to excellent credit. So, be sure to weigh all the pros and cons of leasing a vehicle before you start going from dealer to dealer.
If you decide that leasing isn’t the way to go, the good news is that financing a car may be more cost-effective than you think. Even if you have poor credit, getting a car loan is possible as long as you’re working with the right dealer and lender.
Finding a Car Dealer with ACE
Here at Auto Credit Express, we strive to take the stress out of your car buying experience. We know how hard it can be to go from dealer to dealer only to be turned away due to your credit situation. We can help alleviate that stress by matching you to a local dealer that has the right type of lenders to work with you.
We work with a nationwide network of special finance dealers that have subprime lending resources available to help people who have no credit, bad credit, or even bankruptcy. Let us help get you on the path to successful auto financing today – simply fill out our online auto loan request form to get the process started now!