Bad Idea To Lease A Car
Nowadays car leasing is a heavily used technique that most car dealers favor. It’s understandable why it’s so attractive to the average citizen. You have to deal with a little cash at the beginning and a low payment program that stretches throughout the 24 or 36 months of leasing. If you’re the kind of person that favors car changing every 2 or 3 years than the leasing systems seems your best bet. Or is it?
Think about it. First of all consider that you owe something, yet you do not own anything. One of the main problems in car leasing is that you cannot claim that the car you’re driving it’s yours despite the fact that you’re paying for it, therefore getting zero equity. Despite the fact that the lease is at all times secured by the very car that you’re using, you have no collateral in case of a required back up. Consider that the dealer holds both ends of the rope: ownership of the car and your leasing contract.
You may call this a lease as much as you want, yet if you look on your credit report you will see that it appears as a payment established with a monthly fee, which seems to be peculiarly similar to the usual loan, but worse since in a loan at least you can call the car yours.
Another downside to it is the limited future options. Leasing a car will be seen more like a loan compared to a house or apartment leasing. This means that you’re up for the entire lease balance at any given point during its term. Usually leasing companies will let you terminate the lease earlier than scheduled but this usually comes at a high price in penalties and other fees.
If you’ve entered a lease than you better stick with it to the end because there is practically no way out without having to deal with a truck load of fees and penalties that are meant to actually make you keep your end of the bargain until the lease expires. Considering how fast life is changing all around us, it is so smart to enter head first in a leasing contract that offers so little room for change?
Another problem with leasing is the multitude of restrictions that are given in subjective parameters which makes it even worse. For example, you’re given a limited number of miles each year. Crossing that boundary may cost you very much since each extra mile can be taxed for up to 15 cents. Normal Wear and Tear is accepted, but what exactly does “normal” mean? If you see a little damage to the upholstery, that might mean normal to you, but almost every time, the dealer is going to perceive “normal” differently. And since the dealers lawyer prepares the lease (you can never bring your own lawyer) there’s nothing you can do about it.
When entering a lease, usually people base their mileage estimation on their driving history. Few take into account the fact that the daily pattern may change at a given time and they will be forced to drive from 30 miles per day to 100 miles. What then? If you found yourself in a situation like this, than you better have deep pockets because you’ll be paying a lot of extra miles. Because of this, you can never calculate with precision the total cost of the lease because, there are variables that aren’t controlled by you at all times, therefore you’re forced to take a no so calculated risk anymore.
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