Leasing a car is one way of driving a new car now and then without parting with large sums of cash. A lease involves making a down payment to the car followed by monthly payments as required by the contract terms. The vehicle is returned after lease expiry. Down payments are lower than the ones paid for a new car. Despite renting being a cost effective way of having a vehicle, there are other pros and cons attached to it.
Lower monthly payments
In general, less monthly payments are attracted by leasing deals than buyouts. A dealer with leasing packages has numerous offers that encourage leasing, typically by lowering rent monthly installments.
Frequent vehicle switching over short periods of time.
Based on the short periods leasing contracts have to maturity, it is rather exciting changing cars every two to three years after use. On the contrary, after buying out a vehicle, one is stuck with it unless selling out with unfavorable depreciated resale rates.
Warranty and safety features
Leased vehicles have impressive warranty packages. More particularly because most of them are still on manufacturers’ warranty covers. They are also new modern models that come fitted with the latest technology for traction, braking, and anti-blind spot technologies to mention a few.
Expensive in the long run
Leasing is comparable to paying for the use of a vehicle for a limited period. Upon expiry of one lease, either a new rental agreement or buying out a car will keep one on wheels. Either way, long periods of payments are involved.
Most leasing dealerships have a mileage limit of between 10,000 to 15000 yearly mileage. Limitations can be frustrating, worse still are the penalties attached to exceeding these limitations.
High insurance costs
It is rather astonishing to most people when they learn that insuring a leased vehicle is more expensive than thought. The cover can be higher with more than $300,000 in liability coverage than that of a bought car. Such requirements qualify leased vehicle insuring more costly than acquired ones.