Leasing a Car – Pros & Cons
To Lease or Not to Lease
The pros & cons of leasing a car
In 2013, my 1998 Toyota Camry was falling apart. It kept overheating and it was just time to retire it. I had just started my career as a teacher, so I finally had enough money to get a new car of my own. My dad was the one who suggested leasing because I actually didn’t know such an option existed. We went to the Honda dealership and after six hours there, I leased a 2013 blue Honda Accord EX for three years.
As the end of 2015 approached, I realized I had to decide whether I wanted to buy my 2013 Accord, upgrade to a 2016, or get something totally different. In November, I just decided to go to the dealership by myself. I just want to look around, get an idea of what I wanted, and get some answers to my questions. Well, a few hours later, my dad was there and I was signing lease papers for a 2016 black Honda Accord EX. I did not expect for the lease to happen on that day, but I got a pretty good deal. Plus, I was extremely excited to get a fresh, new car again. It literally had less than 20 miles on it! 🙂
Have you ever thought about leasing a car? Are you trying to decide if leasing is right for you or not? I am going to share what I see as pros and cons to leasing based on my experiences.
- You can get a brand new car with hardly any mileage and in top-notch condition.
- After three years (usually the time frame), you can choose to purchase that car or lease a brand new car again.
- You typically don’t have to worry about mechanical problems occurring within the first few years of having a brand new car. This one was HUGE for me because I felt more comfortable and safe. My Camry would randomly flash the “check engine” light. It would stall even though it was automatic. I was always worrying about noises I heard while driving. It was just such a relief when I got a brand new car!
- Monthly payments on a lease tend to be smaller than if you were to buy a car. Those payments can drop even lower if you pay a higher down payment as well. I currently pay $310 for my 2016 Accord. This allows you to drive a more upgraded version of the car you want for a lower price than purchasing. Both times when I leased my car, I was able to upgrade to the middle trim (EX) because I really wanted the features it was equipped with (sun roof, right passenger camera, remote start, push-to-start, extra touch screen monitor, and more exterior lighting).
- If you add a maintenance plan to your lease, then you don’t have to pay for services like oil changes or tire rotations. Sometimes you can negotiate this with the dealership and get it at no charge.
- Dealerships always seem to be running deals for leasing options. For example: $1000 down (if you have good credit) or $199/month when you put $2500+ down on a car.
- There is a limit on mileage and a charge for each mile over that limit. It’s a charge of a few cents, but that can easily add up. This mileage limit will vary on the terms for your specific lease that you agreed upon. I currently have a 39 month lease (it was part of a special the dealership had at the time), but when I return the car, it has to be at 36,000 miles or less. My sister leases a 2015 Toyota Camry, but since she drives pretty far each day to school, she opted for a 45,000 mile option which costs a bit extra overall.
- If you have any dings or damage to the car, then you will have to pay to fix it or you’ll lose value in the car when you return it to the dealership. Whereas if you own the car, you can decide if you want to or need to fix it or not.
- If you have bad or no credit it will be more challenging or not even possible for you to lease a car. If that’s an issue for you, check out my post on building good credit.
- Insurance tends to be more expensive. I currently pay about $150 for car insurance at the age of 26. I have one major accident (that came along with a traffic ticket) that occurred in 2009. So even with all that time passing, I still pay quite a bit for insurance, unfortunately.
- You don’t have any equity (ownership or value) in the car. You won’t make any money off of it.
If you read my post about buying a house under the age of 25, then you know I am against renting a house or apartment. However, I feel that it’s a totally different boat when it comes to leasing a car. First of all a car (typically) costs a lot less than a house. Also, cars depreciate pretty quickly. We’ve all heard that as soon as car drives off the dealership lot, it loses value. However, houses can actually gain value even as they age.
Even though the cons may seem to outweigh the pros to some people, for me the pros have much more value. I am obsessed with cars, and I have about 15 different dream cars, no joke! I love getting a new car every three years. I love that in the three year period, I don’t worry about my car breaking down or malfunctioning. I was frightened to drive my 1998 Toyota Camry on I-85 to college. It was such a waste of money, time, and effort to try to figure out what was wrong all the time. Plus, half of the time it was a mystery problem!
Mileage to me isn’t a huge issue because my commute to work is only about 25 miles total a day. I don’t drive too far from my house very often otherwise. Plus, I have the Summer and holiday breaks off as a teacher, so that saves on mileage too. When I returned my 2013 Accord, I still had 6,000 miles left I could have put on it.
However, if you are someone who has an extensive commute or if you take road trips frequently, then leasing probably ins’t the best idea. If you are rough on your car, get in accidents often, or don’t take care of your car (interior and exterior), then leasing probably isn’t for you either.
So leasing isn’t for everyone, but it’s definitely a great option to consider. Who knows…maybe I’ll purchase my next car, but for now I’ll enjoy my leased baby! 😀
Do you lease your car? If so, what are your opinions?