4 Reasons Why Leasing Your Next Car Might Be a Bad Idea

Posted on March 13, 2023

While leasing is a unique kind of car ownership that differs significantly from traditional purchases, there are some situations where a straightforward purchase would be preferable. We'll go over a few of the reasons why renting might not be the best option for you in this article.

Mileage Limits

Mileage restrictions are perhaps the biggest reason it might be bad for you to lease a car. During the duration of the lease time, you are only permitted to drive a certain number of miles per leased vehicle, therefore you must carefully monitor your mileage. This has a significant impact on your freedom when it comes to driving because every trip must be calculated based on the distance involved. Any additional kilometres will incur exorbitant fees that you will be responsible for paying.

No Ownership

Leasing is giving up ownership of the vehicle and treating it more like a rental for a predetermined time. This has a number of drawbacks. Leasing puts you in the red from a purely financial standpoint because you have no equity in the vehicle. When you purchase a car, you become the owner of the vehicle and acquire an asset of some value. Yet, when you lease, you don't have that, thus there is no opportunity for you to recover any of your initial investment.

Lack of ownership also means you’re limited in your ability to change anything in the car, if you don’t like the colour for example or you think the engine could use a tune up, lack of ownership ties your hands from doing anything about it.

Cancelation Fees

The majority of leases are multi-year agreements with set monthly payments, and once you sign one of these agreements, it becomes quite challenging to break it. It's completely possible that you could end up being screwed if you've run into financial trouble and are unable to make those monthly payments because a common early cancellation clause requires you to pay up the whole balance of your lease agreement at once.

Limited Customization

When you buy a new car, you can choose whatever features and extras you like, but when you lease a car, you aren't allowed to enjoy such luxuries. You can still choose from a wide range of vehicles, but you won't be able to customise any of them to suit your individual tastes.

Those are the 4 main reason why leasing a car might be bad for you. Thanks for reading!

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