Are car leases a good idea?
It depends on your money situation and your priorities, but in the long run, most people will save money if they buy. Why?
- There's flexibility in the model you can select, unlike when you lease.
- You can drive for miles and miles without a monetary penalty.
- No one will care if there’s a small dent on the driver-side door (unless you have a picky spouse).
Basically, anyone who plans to keep a car for 5 to 10 years (or until their kids are embarrassed by it) should buy and start building equity. But if you don’t have much equity or cash to put against a down payment and you want to keep the monthly payments low, leasing might be the better option. It allows you to get a new car every two to three years (hey, some people just can’t commit to a red coupe), and you’d get to take advantage of the latest technology and safety features as you keep trading up.
The downsides? There are limits on mileage (you might pay for going over), and you won’t be building equity since leasing is like renting. Plus, when you turn it in, there will be a close inspection for wear and tear, and you might be charged extra. And leases are hard to get out of if your needs change (like you get a new job with a “company car”), so be very confident when making your choice.
See More: Buying a Car , Buying Guides