When you shop for your new car, you’ll often see enticing deals for attractive lease rates. Restrictions on mileage and maintenance, plus the fact that you never own the car outright and therefore always have a monthly payment, mean that leasing doesn’t work well for many types of buyers.
But that doesn’t mean it’s always a bad idea. There are definitely times when it makes sense to lease a car instead of buying it.
When automakers are confident that their cars have good resale value, they’ll often lower the lease rates and will make back their money when they re-sell the car when the lease expires. Similarly, if you’re uncertain whether the car you want will hold its value, leasing ensures you won’t be stuck trying to trade in a car that no one wants – it locks in what you’ll pay to always be in a fairly new car.
But because you don’t own the car, a lessee must be very careful with the vehicle. You’ll pay for any damage beyond the slightest of scratches when you return your car after a few years, and also for any mileage you accumulate over the specified limit. If the car is totaled during the lease period, you typically lose your upfront payment, so you’re advised to keep that low. And if you don’t expect to be trading in your car after two or three years, whether you lease or buy, you’re probably better off as a buyer.
In shopping for a new car, you can run a Google search for current lease deals; a number of websites collect the most attractive offers for each month. But just be sure you know what you’re getting yourself into for a lease, and also be diligent in researching great deals for ordinary purchases. To see which option makes the most sense for you, if leasing’s restrictions don’t already turn you off, compare the total cost of your lease to the purchase price of the vehicle (the price you’d pay, not the inflated window sticker), minus what you’d likely get in a few years when you sell it or trade it in.
Brady Holt, a Washington D.C. newspaper reporter, has had a lifelong interest in cars in the automotive world, and he’ll share his thoughts at every available opportunity. Brady has written for Examiner.com since 2008, publishing hundreds of car reviews, automotive news pieces and other features. His work can be found on Examiner.com.