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Car Leasing: Synonym with Luxury or Just a Mirage?
Who doesn't dream of having the latest vehicle model? For some reason we link the newest cars with status and glamour. However, due to the recent financial crisis, it is becoming more and more difficult to afford one of these vehicles. That is why many people resort to leasing a car.
Leasing a car is basically renting a vehicle for a certain amount of time, in other words, it is a mirage, an illusion, something that was never really yours. Still some people insist on this method, even though its drawbacks outnumber its advantages.
In the first place, the most obvious drawback of a car lease is that you are subject to car payments indefinitely. You will never be the real owner of the vehicle, and each month you will have to pay the monthly installment. Contrary to buying a car, in which case you at least have the prospect of stop paying the loan installments at some point.
Another huge disadvantage of car leasing is the fact that mileage is restricted. Lease car mileage is usually restricted between 12,000 to 15,000 miles a year. So if you usually drive a lot, or if you were planning a long trip for your vacations, you can forget about car leasing.
To make matters worse, if you go over the set mileage, you need to pay an extra amount per exceeded mile. The amount charged per extra mile is around twenty five cents, so if you drive, let's say four thousand extra miles, you will end up paying eight hundred dollars more on top of your lease.
In addition, insurance companies tend to charge more for lease cars. And the lease companies also require that you get a comprehensive insurance, which results in a huge monthly bill. The insurance bill added to your monthly car payments make a pretty high figure, which you will have to struggle to pay for.
Also, since the car you will be driving for a couple of years is not yours, the real owner will need to make sure that you will meet your payments. The owners do that by requiring higher credit worthiness standards. That is why you need to have an impeccable credit history, if you wish to lease a car.
Lastly, whenever you lease a car you have to comply with the early termination terms. These terms can be kind of harsh, especially if you are the victim of a robbery or if the car is declared a total loss after an accident. In these cases, the insurance only pays for a small amount of the due balance, and you are responsible for the rest.
Buying a car seems like the wiser choice. The vehicle will be yours, you will be free to sell it or do whatever you want with it. You will not have any miles restrictions or high insurance bills. However, if you still feel that a lease car is your choice, be sure to read carefully the terms and conditions of the lease, to know exactly what you are agreeing to.
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