The Cons of Leasing a Vehicle

Leasing a vehicle is one way to acquire a new car. A lease involves making a down payment as well as a monthly payment. Leasing allows the driver to buy the car at the end of the lease term for an agreed-upon price that's listed in the original lease document. Drivers also have the option of surrendering the lease and shopping for a new vehicle.

Overall Cost

Leasing a car costs more than buying in the long term. Buying a car means that once it's paid off, the driver goes without a monthly payment and gets more value out of the car the longer she continues to drive it. With a lease, the driver is always liable for a monthly payment. The buyout amount at the end of a lease almost always represents more than the car's fair market value, which means buying a vehicle at the end of a lease costs more than buying a similar model on the open market or buying the same vehicle at the outset.

Mileage Limits

Each lease includes an annual mileage limit for the vehicle. This is typically 12,000 or 15,000 miles per year, though some dealers allow drivers to pay more for an additional mileage allowance. The presence of a mileage limit may discourage drivers from using the car often or for longer trips, especially if the mileage is approaching the limit prior to the end of the lease term.

Fees

Leases contain numerous fees and penalties that may apply to some drivers. Terminating a lease early may require paying an early-return fee, which can be in the thousands of dollars. Dealers also charge drivers for exceeding the mileage limits on a lease. Drivers are also liable for damage to the car beyond normal wear and tear, which can make turning in a leased vehicle expensive.

Lack of Equity

Drivers who lease never build up any equity in their vehicles. This is the opposite of drivers who buy a car and have the option of selling it or trading it in at some point in the future. At the end of a lease, a driver is left with no vehicle and no equity, and must begin the process all over again.

Customizing the Vehicle

Most leases prohibit drivers from making any major or permanent alterations to the vehicle. This means that a driver can't perform any customization projects such as adding a premium audio system, installing an in-dash GPS device, getting a custom paint job or upgrading the wheels. Drivers who want greater control of their vehicle might be better off buying a car, even if it means only being able to afford a used model.