Pros and cons of Auto Lease

[JamezP]

Knowing about the importance and priority of these benefits will weighed against any disadvantages of auto leasing.

Pros of car leasing are:
1. Lower Monthly Payments - you only pay for the portion of the car that you actually use and your monthly lease payments are 30% - 60 % lower than for the purchase loan for the same car and same term.
2. No Down Payments - car leasing provides the option of making no down payments, although you must still make the first month's payments and official tag and registration fees.
3. Fewer Maintenance Headaches - most people like to lease for a term that coincides with the length of the manufacturer's warranty coverage so that if something goes wrong with the car, the repairs are always covered.
4. Driving a brand new car every one to four years - since monthly lease payments are lower than with buying, you get more car for your money and you can drive any brand new car every one to four years, depending on the term length of your lease.

Cons of car leasing:
1. Early Termination Cost - if you will terminate your lease before the end of your contract, the cost is actually very high. However the cost can be minimized by choosing the right termination choices. Most people end their lease on schedule to avoid all termination costs.
2. No Ownership Equity - the trade-off for low monthly lease payments is that you typically do not build ownership. However it is fairly common that the market value of a vehicle at lease-end is higher than the purchase option price specified in the lease contract.
3. Excessive Mileage Charges - if you exceed the mileage allowance in you lease contract, you will be charged for the extra miles at a specified per-mile rate. However you can reduce your exposure if you buy the extra miles you expect to drive at the time of lease signing. You avoid the higher end-of-lease charges this way. If you choose this option, you will be refunded for any unused miles.
4. Excessive Wear and Tear Charges - if you return a leased vehicle at lease-end with excessive dents, scratches, or unrepaired accident damage, you will be charged because those damages reduce the vehicle's value. Most auto lease companies clearly specify what is considered excessive so that you'll know if you should get it repaired before returning your car. Get the repairs done yourself before you return the car and avoid being charged.