Reviews 4 Cars

You may be attracted to the very many benefits of new car leasing, however you should consider the following questions below before making a decision. Like any type of finance is it important to ensure you are not caused any great deal of unhappiness and unnecessary financial pain.

Do you think you’ll want to end your lease early?
Car lease contracts are purposely written to discourage, even prevent, early termination. To do this usually means you will pay a termination charges and all remaining payments. Therefore, if you lease, you should have a stable lifestyle and a good job situation to minimise the possibility of needing to terminate early. Wanting or needing to end a lease early is the most common problem people have with leasing.

Do you typically know what mileage you do a year?
New-car lease contracts limit the number of miles you can drive in order to calculate the deprecation of the vehicle. The average mileage a year is 10,000-15,000 miles per year. If you exceed your limit, you’re slapped with “excess mileage” charges at the end of the lease. Sometimes, additional miles - if you know you’ll be driving more - can be “bought” up front at the time you sign your lease, at a lower per-mile cost.

Do you think you’ll want to customise your car, make modifications, or repaint?
A leased car doesn’t belong to you, it belongs to the leasing company. Therefore, you cannot make modifications and install custom equipment that alters the car. If you do, you’ll likely be charged for the cost of repairs to undo what you’ve done.

Do you mistreat your cars or fail to keep them in good condition?
Leasing companies require that you return their car at the end of the lease with no more than “normal” wear-and-tear. Anything more and you’ll pay for the damages. You are responsible for insurance, upkeep, and maintenance just as with a purchased car. Some people mistakenly believe the leasing company is responsible.

Are you emotionally attached to the idea of modifying your vehicle?
When you lease a new car, you have no ownership during your lease, unless you choose to buy at lease-end - which about a third of all leasers do.

Do you have a flawed credit rating?
Because leases typically require a smaller down payment and lower monthly payments, you generally must have a better credit rating than would be required for a loan because of the higher risk to the lease provider. If you have a history of making credit payments promptly and don’t have an excessive debt load, you’re going to be fine.

Do you like paying off your loans and driving your cars until the wheels fall off?
One of the benefits of leasing is that you can drive a new car every two, three, or four years. However, you’ll always be making payments. For many people this is an acceptable trade-off considering the benefit of always having a new car that is always under warranty. If you prefer to make higher monthly payments but then have a period in which you are payment-free, then buying is a better option for you than leasing.