Leasing is a particular way of car ownership that is quite different to your regular purchase, while it has its advantages there are some reasons that you may be better with a simple purchase instead. In this article we’ll go through some of the reasons that leasing might not be right for you.
Mileage Limits
Probably the biggest problem with leasing is mileage limits. When you lease a car you have a maximum amount of miles you’re allowed to drive for the entirety of the lease period which means that you have to keep strict track of how many miles you’re using. This has a serious effect on your freedom when it comes to driving, every journey has to be considered for how many miles it will take. Any miles over the limit will be charged back to you at an extortionate rate.
No Ownership
Leasing means that you do not have any ownership of the car, you’re more or less renting it for a set period, and this has a variety of negative consequences. From a purely financial perspective leasing puts you in the negative because you have no equity in the car. When you buy a car, you own the car, and therefore you have an asset that’s worth something. However when you lease you don’t have that and therefore you have no way to get any of the money invested back.
Lack of ownership also means you’re limited in your ability to change anything in the car, if you don’t like the colour for example or you think the engine could use a tune up, lack of ownership ties your hands from doing anything about it.
Cancelation Fees
Most leases are in contracts of several years with specified monthly fees and once you’re in that contract they make it very difficult to back out. If you’ve fallen on financial hard times and find yourself unable to pay those monthly instalments it’s entirely possible that you might just be screwed as a common early cancellation policy is that you have to pay off the entire remaining amount of your lease agreement in one go.
Limited Customization
When you buy a new car you get to choose all the different features and bonuses you want, but when you’re leasing you have no such luxuries, there’s still going to be a variety of cars to choose from but any options to personalise the car to your specific tastes will not be available.