Contracts are typically three years in length, however some companies allow five year contracts at slightly higher costs per month than those offered on three year contracts. if you stay over the contract's terms then it is possible that the company will buy back
why car leasing is a bad idea?
leasing a car's monthly payments are more than the purchase price of the car and houses, and lease agreements often last for 3 years. legislators in california and hawaii have proposed legislation to allow leases from 4 years.
in addition, leasing cars can result in higher repair bills greater than what one would have if they owned the vehicle outright. in short, leasing a vehicle can be a bad idea all around- costing more money, having greater upkeep expenses with huge repairs, and less options in deciding which used car you want before your lease is up!
lease agreements typically have very long terms which makes it difficult to switch after three years when your existing renewal becomes due or in case of damage or accident. however in light
is it ever a good idea to lease a car?
get your own answer using the steps below.
-how much do you plan to drive it? frequent, long trips?
-do you have a trade-in vehicle or will the dealership calculate your monthly payment for one at wholesale value? do they also offer a higher down payment if you have a trade in?
-do you need a loan with lower interest rates to pay off the entire car before hand because of low credit, etc.?
-what is the annual mileage requirement for this vehicle vs. leasing companies advertised mileage requirement on their lease agreement quotes? if it's not an “equivalent” or “close” match, can you use public transportation instead of driving as often as required by them under the terms
is leasing a car a waste of money?
yes.
leasing a car is an expensive process all round because of the high interest rates on it, and this is one of the reasons that people often get into serious financial trouble for not paying their lease. americans are fed by ads to believe leasing will get them more car than they could ever buy outright, but the reality of it is that leasing dramatically lowers trade-in value which means you'll never exit with enough to meet your payments or exit with anything at all if you default. essentially, every dime spent on leasing goes towards negative amortization – it's money down the drain.
lease agreements can be complicated features by deceptive salesman suggesting buyers may owe less than they actually do when in fact leases provide no equity
why leasing a car is smart?
leasing can be a smart decision because the monthly payment is typically much lower than buying, which means you are paying off your car in small chunks. it also gives you added flexibility to trade in for another vehicle every few years without the hassle of selling your car privately to finance a new one.
one drawback for leasing instead of owning is that if there's ever damage or wear outside what's classified as wear and tear, that will be assessed against your lease value at the end of the lease period, leading to an expensive repair bill. this drawback can easily be circumvented by taking out insurance coverage with comprehensive auto protection (cap) benefits included – cap covers accidental damage including burning oil or leaves coming through your engine block–
