Leasing a car may seem like something only rich people do, but it’s often the most financially responsible choice you can make. Although buying a car will save you money in the long run, leasing can be a good option for people who live in big cities or need more flexibility. We’ll go over some of the benefits and drawbacks of leasing a car so that you can take advantage of this potential money-saver.
Benefits
Warranty
Most manufacturers include a free warranty for the entirety of the lease. For people who don’t know much about maintaining a car, this can be a lifesaver. You can get your car serviced at the dealership for free whenever you need to. If you purchase a car, you’re on your own for any and all malfunctions. This can get very pricey very fast.
Freedom
Leasing a car gives you the freedom to swap your car out every time your lease changes. This means that if you have kids and need to switch your bachelor’s Porsche to a mini-van, you can swap it out without having to worry about selling your car. Whenever your needs change, your car can change with it as long as you’re willing to wait until the end of your lease. The typical length of time for a lease is three years, which is a much shorter duration than most people own a car before selling it.
Requires Less Money Upfront
Many people can’t afford to buy a car, and taking out auto loans can be a costly decision. Leasing allows people with less cash-on-hand to get a car without having to come up with a huge sum all at once. You can even save up to buy a more expensive car while leasing a cheaper car.
Cons
Mileage Restrictions
When you own your own car, you can drive it as much as you want. If you’re leasing, however, you’re only allowed to drive the car a certain number of miles. If you go over that amount, you get charged for every mile you exceed the limit.
It Requires Good Credit
If your credit is shot, leasing a car might not be the right move. Good credit will get you a better deal on a lease. If your credit is bad, you’ll end up spending a lot more. It may be more financially responsible to buy a cheap car than to lease a cheap car with bad credit.
Leases Are Difficult To Break
While leases offer you more freedom, they do tie you to the car for the duration of your lease. A lease is a contract, and breaking that contract comes with a penalty. It’s oftentimes more expensive to get out of the lease than it is to just pay the remainder. If you’re not willing to dedicate that fixed amount of time to driving and paying for your car, a lease is probably not the right choice for you.