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Home > Leasing a car doesn't make you sophisticated

Leasing a car doesn't make you sophisticated

July 7th, 2010 at 05:06 am

This is a list of the 7 reasons why its always a BAD idea to lease a car.

1. If you get in an accident and the vehicle is totaled, you’ll still be responsible to pay back the full lease contract amount. Even if the insurance company gives you back less than what you owe to the dealership, you’ll be responsible for the full amount. If you do go with a lease, at least be smart enough to buy “gap” insurance which covers you for that difference that you would owe to the dealership.

2. Many times, the lease agreement will be for 5 years/60,000 miles. So, if you go over that 60,000 and keep it until the 5 years is up, you’ll pay a penalty for every mile over 60,000 miles. Think about how many miles you put on a car each year. Most people use well over 12,000 per year.

3. If you lose a job or experience a heavy time of financial hardship and cannot afford the payment anymore, the dealership will recover the car, sell it an auction, and if they sell it for less than you owe for the lease agreement, you will be legally responsible to pay the difference.

4. The car is NOT yours, yet they still make you pay for the maintenance of it.

5.Again, you can’t claim the car as an asset. It is technically still an asset of the dealership that leased it to you.

6. A lease starts a trend of perpetually paying a car payment. If you never paid a car payment and the average car payment in America was $350 a month, putting that $350 a month in a mutual fund that made 10% would become $791,171 in 30 years. That is astonishing, and what astonishes me more is that there are people out there that will continue to defend leasing cars and financing cars with no money down because the “maintenance costs” are so much lower for a new car. Give me a break.

7. If you decide to take the option to buy the car at the end of the lease term, you’ll have paid much more than the cost of the car even if you had financed it.

3 Responses to “Leasing a car doesn't make you sophisticated”

  1. HouseHopeful Says:

    I totally agree, leases are not the best option.

  2. Belmont Thornton Says:

    Even I agree with you that leasing is not a good option, as you have to pay incase of any damage caused to your car.

  3. M E 2 Says:

    While I have never leased nor do I intend to, I have also NEVER heard of a 5 year lease, ever. 24 months minimum - 39 months maximum.

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