Car Leasing: The Reality to Taking the Lease Option

Here are some of the pitfalls of car leasing that you should be well aware of before taking that step to sign a leasing contract.

Pay more

If you lease a car, you might think that you are better off because you get a chance to drive a really nice car without having to pay a huge sum of money. The reality is however that in the end you pay much more than you would have paid if you were to purchase the same car outright. You basically pay for the privilege of not having to pay a massive upfront payment. Some may not be bothered that they have to pay more, but if you think about it you will be much better off just saving your money and buying a car when you can afford to do so.

Mileage limitations

If you think you can lease a car and drive it as often as you like, well think again. Most leasecontracts have some sort of mileage limitations. You either have to stick to these annual mileage limitations or pay a premium when the lease is over.

Be careful with the car

You have to be extremely careful with lease cars, due to the fact that most lease contracts state that you must keep the car in perfect condition. Otherwise again you will have to pay some kind of premium on top of what you have already paid.

There is no backing out

Once you have made that decision to sign the lease contract and drive the car away you actually can't change your mind. If something comes up and you need to take the car back, you will find that you will have to pay a huge fee for terminating the contract.

You are left with nothing

When your lease plan is over you have nothing to show for it, you can lease a car for up to 5 years. This means that after the 5 years you will have to either go and get another car on a lease plan or find the money to buy a car outright. Unless you go for the option that allows you to purchase the car at the end of the lease. This kind of lease option is very expensive because at the end of it you will have to pay something called a balloon payment that will be the remainder of the cost of the car. Therefore if the car was worth a certain amount when you signed the leasing contract you would still have to pay that same sum of money. This means that even though the car would have depreciated in value you would still be paying the same and more.

You can't do anything to the car

Just like if you were to rent a house, can't totally renovate the house. With car leasing you can’t totally renovate the car. Like say for example you wanted to customize the car you would not be permitted to do this by the leasing company. Therefore you have to take the car like it is and live with it.

So there we have it, the leasing option is not always the best route to take if you are looking for a car but can't afford to pay for one outright. This option might be good for some people but it is not good for others.