Purchasing a car can be an overwhelming experience. Every day, you are bombarded with sales messages that promise you the deal of your dreams. Purchasing a used car can save you money, but you don't get the excitement of driving away in a brand new vehicle. If you're worried about how to pay for your next vehicle, then leasing is worth your consideration.
Definition
When you purchase a car, you own it. With a lease, however, you are allowed to use the car for a set period of time (usually 24 months). At the end of the term of your lease, you must return the car.
New Car
One of the advantages of leasing your vehicle is the chance to drive a new car every two years. At the end of the lease period, you return your vehicle and begin a new lease on a different one. You also don't have to worry about finding something to do with your old car when it is time to get a new one. You simply return the older car at the end of your lease.
Lower Payments
The payments on a lease are usually lower than on a car you purchase. This allows you to be able to afford to drive a more expensive car than you would if you had purchased it. A lease may be a more affordable option for those with a lower monthly budget.
More Expensive
Leasing a car does have its disadvantages. One is the overall cost. While your monthly payments are lower, the payments never end. Therefore, you pay more because you never pay your car off in full.
When Your Lease is Up
At the end of your lease, you must choose between returning your car and purchasing it. If you choose another lease, you never have the satisfaction of ownership and you will always have a car note. If you want to keep your car after the lease period is up, you have to pay additional money to purchase it.
Early Termination
Breaking your lease early will also cost you. It is impossible to predict the future. If you lose your job or suffer some other financial hardship, you may unexpectedly need to opt out of your lease early. Often, you are still required to pay the remainder of the lease or a financial penalty for early termination.
Other Costs
Leased vehicles also have a mileage restriction. If you drive a lot, this could be a problem. Leases usually restrict your yearly mileage to between 12,000 and 15,000 miles. For each mile you drive over the limit, you must pay a fee of about 25 cents.
Each individual's situation is different. Carefully consider the advantages and disadvantages of leasing to determine if a lease is right for you.
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