Who Should Lease a Car?
Even though you may be attracted to the many benefits of leasing, sometims leasing is not right for everyone. read the questions bellow, and if you answer yes to all the questions, than leasing a car is not for you.
Wanting and needing to end a lease early is one of the biggest problems with people who lease. The Leasing contract is made so that you do not end your lease early, if you do, you will have to pay off the rest of what you owe and some fees, and it might end up costing you more. That is why it is important that you have a stable job and can afford the lease, so that you can keep the car for as long as the contract says. Most lease company offer you to transfer your lease but it might be hard to find someone willing to take over. Swapalease.com helps you finding someone to take over you lease payments.
Do you typically drive your cars more than 15,000 miles a year?
If you drive more than 15,000 miles a year, with the new-car lease contracts, you will be charged with “excess mileage” charges at the end of your lease. The new-car lease contract limits the number of miles that you can drive per year (10,000-15,000). If you know you will be driving a little more you can “buy: up additional miles up front at the time that you sign the lease. Additional miles usually cost between 0.10 to 0.30 cents per mile.
Do you think you will want to customize your car, make modifications, or repaint?
When you lease a car it does not belong to you; it belongs to the leasing company. That means that you cannot customize or make any changes to the car. You have to keep the car as is or at least remove any custom parts before you return your car. Most lease company are OK with window tinting though.
Do you mistreat your cars or fail to keep them in good condition?
You are responsible for insurance, upkeep, and maintenance just as with a purchased car; not the leasing company. If you have any more than the expected normal wear and tear of the car, you are responsible for paying for the damages.
Do you prefer "fad" cars or cars that frequently change style?
The “fad” cars usually lose resale value rather quickly, which means their lease "residual" value is lower. Low residual value means higher monthly lease payments. This kind of car can easily have a higher monthly lease payment, than a more expensive car with a better resale history. High resale value partly explains why Japanese and German car lease are so attractive lately.
Are you emotionally attached to the idea of owning your vehicle?
When you lease a new car, you do not own the car during your lease, unless you choose to buy the car at lease-end, which about 1/3 of people who lease do.
Do you have a flawed credit rating?
Leases require a smaller down payment and lower monthly payments, because of that; you generally must have a better credit rating than would be required to have for a loan. That is because of the higher risk for the leasing company. If you have a history of making credit payments promptly and do not have an excessive debt load, you are perfect. If you do not, you may have to pay a higher interest rate to lease or they can refuse you. (You can check your FICO credit "score" from all three credit reporting agencies used by lease companies a www.MyFICO.com)
Do you like paying off your loans and driving your cars until the wheels fall off?
One of the major benefits of leasing is that you trade in the car after two, three, or even four years, the negative to that is that you never pay off the loan. This means that you are always making payments. If you buy a car you can pay off the loan and drive the car payment-free for as long as you want.
How is your health?
Leases are financial obligations, and cannot be simply returned before the lease is up. If you have medical problems that may prevent you from completing a lease, it is better not to lease.