10 Reasons to Think Twice Before Leasing a Car

10 Surprising Reasons to Rethink Leasing a Car Before Signing the Dotted Line

Are you planning to lease a car? Think twice. Although car leasing might seem appealing at first, there are many factors you need to consider before making a decision. With numerous drawbacks to car leasing, buyers often find themselves caught in a lengthy agreement with penalties for early termination.

1. Higher Costs Over Time

Leasing a car can be more expensive over time, especially when considering the total cost of ownership. According to Kelley Blue Book, lease agreements include purchase fee, registration fees, insurance coverage and various other expenses that may contribute to your overall expenses. At the end of the lease, you won’t own the vehicle and have nothing to show for your years of payments. Explore car buying options like buying a home at Harmony Own, that empower buyers without a major initial investment.

2. Lack of Long-Term Control

Your lease may come with various limitations on the number of miles you can drive per year. For instance, you may face additional fees for excessive wear or mileage above the agreed limit. Other drawbacks of car leasing include the lack of freedom to make any modifications to your vehicle.

3. Mileage Restriction and Fees

Typical car leasing agreements come with a yearly mileage limit of around 12,000-15,000 miles per year. If you exceed the allowed mileage, you’ll be charged additional fees at the end of your lease term. Car buyers often prefer to own their vehicles to avoid such restrictions. Owning a car without savings provides one with freedom over purchasing personal property such as furniture on lease and personal loans options, as seen on websites like HarmonyOwn.

4. Early Termination Fees

The early termination clause in a car lease agreement will likely have significant penalties if you choose to break your contract before the agreed-upon term. According to Edmunds, lease agreements usually make this process more costly, making it more difficult to end the lease and buy the vehicle.

5. Insurance Coverage and Requirements

Lease agreements typically require you to buy comprehensive and collision coverage with high deductibles. According to NerdWallet, full-coverage insurance involves comprehensive coverage, medical payment coverage, collision coverage, liability coverage and personal injury protection, and higher premiums could significantly impact your insurance costs each month.

6. Depreciation is Beyond Your Control

Lease agreements factor in the car’s depreciation based on projections made when you signed your lease contract. According to Investopedia, your car’s depreciation could be much greater than initially estimated, leaving you with substantial fees when returning your vehicle.

7. Break-even Point Hard to Predict

Predicting when the lease payments plus the down payment equal the car’s initial purchase price is hard. Unexpected repairs, excessive mileage or wear could inflate costs and delay the break-even point. Be prepared to factor in your total expenses such as servicing and gas before leasing.

8. No Customization or Personal Touch

Make no mistake; car leasing agreements restrict modifications to the car. Adding functionality or an aesthetic personal touch could affect your ability to renew the lease or sell the car.

9. No Long-Term Control

Long-term auto lease agreements may limit the type of work done on the car and can lead to negative legal implications if the property under contract is altered or damaged. Owning your vehicle allows the freedom to modify and personalize your car.

10. Flexibility Concerns with the Leasing Process

Unlike purchasing a home, which offers flexibility with partner programs such as those available at HarmonyOwn where clients are still able to make flexible repayments and are instantly approved up to $3,500, leasing contracts can leave customers without flexibility to deal with change of heart or situations such financials issues which makes them less desirable. Before choosing between buying home furniture shopping and signing a vehicle lease, remember to weigh the long-term costs of each, and make a decision which is right for you.