Is Car Leasing a Waste of Money?

Is Car Leasing a Waste of Money?

When it comes to the decision of buying or leasing, there are things to consider, including your future wants and needs, and what you value in a vehicle.

Do you value driving the latest and greatest cars? Typically, people who lease are looking for a smaller monthly payment and the ability to drive a new vehicle every few years. When you lease a new car, the monthly payment is usually cheaper than it is with a loan. This is very appealing to borrowers who want to drive a new vehicle without a big payment.

To help you decide if leasing is for you, ask yourself these questions:  Do

you always want a car payment? If you’re OK with

always having an auto loan payment, leasing could be for you.

With leasing, you’re not paying the car off, you’re just paying to drive it.  Do

you like customizing your vehicle? Do you like adding

decals, customizing the wheels, lifting, etc.? Then leasing may not be for you. If you lease, you must return the car to the leasing company with the same equipment that it had, within normal wear and tear.  How

much do you drive? If you drive more than 30,000 to

40,000 in a few years, you usually pay extra for a lease.

Leasing has mileage limits that vary, and if you go over mileage, you’re going to pay extra per mile.  How

rough are you on vehicles? If you’re a careful driver,

maintain a clean car, and have enough income to pay for maintenance, leasing may be for you. If you return a leased vehicle that has an issue – say a cracked windshield you didn’t get repaired – the leasing company will charge you,

and you’re going to end up paying for that cracked window anyway.  How’s

your credit score? If your credit score isn’t the best,

you may not qualify for a lease, since the vast majority of leases are for good credit borrowers. And if you qualify with a lower score, you’re likely to have a higher money factor (leasing interest rate) than someone with a good credit score, which increases the cost of a lease.

Your answers to these questions can help you determine if leasing is a waste of money. Everyone’s preferences differ when it comes to what they want out of a car, so whether or not it's a waste of money for you depends, because for some borrowers, car leasing is a great deal.car leasing news