Should I Lease A Car

When it is time for us to buy a new car, most of us are not able to pay cash for the vehicle.

That leaves buyers with two choices, financing or leasing.

For those choosing to finance their purchase, in recent years the terms of those loans have been getting longer and longer.

With this longer period of financing the purchase comes lower monthly payments,

but over the length of the finance period the buyer will end up paying more in interest on

the loan.

When You Lease A Car You Are Not The Legal Owner

So many buyers have been turning to leasing their new car, which in essence is really just

another way of financing their purchase.

The biggest difference is that by leasing a vehicle you are never the legal owner of the

vehicle, you are by law the lessee.

This form of purchasing a new vehicle has become so popular, that so far this year 62% of individuals who purchase a Lexus model have done so by signing a lease for the car.

From a strategic standpoint for auto manufacturers, when an individual purchases a vehicle with a lease period or 24 to 36 months,

they often turn around and lease another vehicle from that same manufacturer.

This leads to very valuable customer retention for the auto maker.

There are drawbacks to leasing that buyers need to be aware of before they lease a car

and sign the dotted line.

Determine How Many Miles You Drive Before You Lease A Car

With a lease comes mileage limitations or restrictions that typically are set at either

9,000, 12,000 or 15,000 miles.

When I am in a cab, I sometimes watch the meter as the cost of the ride accumulates for

every quarter of a mile driven.

If you sign a lease and go over the number of miles agreed upon in your lease contract, your vehicle kind of becomes a cab, because for every mile you drive above that agreed

upon figure you will be paying a mileage fee.

If you don't estimate your mileage needs properly going into the lease, these mileage overage charges can mount up quickly and

can end up costing you dearly.

I have owned my car for eleven years and it was paid off years ago.

I have equity in it and if I choose to sell it today I would be able to retrieve that equity

through the sales price.

With a leased vehicle you are essentially just renting the vehicle and you are not building

up any equity.

When the lease is over, you either start the process over by signing a new lease, or you finance your new purchase, both of which

come with new monthly payments that you must make.

The question of should I lease a car is one with pros and cons and one that can only be answered after weighing your options and choosing the one that you feel works best

for you.