8 Reasons You Shouldn't Lease a Car
Before you sign that paper, consider eight reasons why leasing a car may not be the best choice.
Written by Alex Reale
Reviewed by Kathleen Flear
Table of Contents
Leasing a car
is just so tantalizing. You get this nice new car without the sticker shock, plus you get to trade it in later
for an even nicer version of it. And if that all goes well you can even buy it outright. Leasing is especially attractive if you’re in need of a car for only a few years, or you don’t drive very much, or you’re just a car person and you have to get behind the wheel of that new Jeep Wrangler.
But before you sign that paper, consider eight reasons why leasing a car may not be the best choice.
Defining a lease
Before we move on to the darker side of a lease, it’s helpful to know exactly what we’re objecting to. When you lease a car, you make an agreement with a dealership to rent a car for a specified period of time and a specified number of miles. At the end of the agreed-upon term, you give the car back to the dealership, or you can buy it.
Sounds fun, right? But before you go salivating over the charms of a monthly payment on an Audi Q5, let’s take a look at the drawbacks.
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Mileage, renting
MORE: Dave Ramsey Warns Against Paying a Hidden Interest Fee While Leasing a Car
The first problems with a lease are right there in the definition of a lease: you’ll have mileage restrictions, and you’re renting a car. If you’re the type of person who can plot out their mileage needs with precision, and don’t care for spontaneous Joshua Tree trips, then this may not pose a problem to you. But if you foresee any sort of surprises in your life, then this should be taken into consideration.
The car rental thing has a few issues folded into it. First, you’ll have to treat it like a rental, which means no customizing. Bid adieu to any notions of knockoff Rolls-Royce interior ceiling stars.
Second, you’ll have to adhere to the exact maintenance rules of the manufacturer. No experimenting, or slacking off on that oil change, or it will cost you more than just your own frustration.
Finally, akin to that frightening moment when you get back to Enterprise and they inspect the car for dings, the dealer will have their own rules about what amount of normal wear and tear is reasonable, notes
Savvy Savings
, and this may be a morass of unpleasant surprises.Financial questions
MORE: What is the Best Time to Lease a Car?
The watchword for anything involving car acquisition is always “depreciation,” and it’s no different here. The minute you drive your cute new car away from the dealer, it’s depreciating, and you’re spending the same amount of money on it each month. This is a pretty impressive gouge by the dealer.
Another depreciation-related issue is the investment you’re making, or actually not making, in your new car. When your lease is over, you’ll be giving it back to the dealer with nothing to show for it except the enjoyment you hopefully got from driving it. And if you buy it from them, you’ve now paid for more than one car. Imagine if you were able to sell that car instead!
Rounding out our list are the insurance, registration, and accident issues. Typically car insurance costs more for leased cars, registration fees are higher on new cars, and if you get in an accident that totals the car, your lease terms remain the same. You can see how this would be incredibly upsetting and expensive.
If leasing works best for your lifestyle and budget, then go for it. But consider the potential downsides and make sure you’re informed before you sign that dotted line.
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