Briefly describe the disadvantages of leasing rather than buying a car.

Question

What will be an ideal response?

Answer 1

1. No Equity - You never build any equity or ownership in a leased car. You are essentially renting a car for three or four years. Despite making an upfront payment and multiple monthly payments, you still do not own anything. You have no down payment and no vehicle to trade-in, so whatever you need to put down on your next purchase or lease comes out of your pocket.
2. Continuous Payments - When you are done with the lease, assuming you still need a car, you will turn in the lease and then lease again … and again … and again. You will never enjoy a break in payments, since you will constantly be making lease payments. If you purchase the car at the end of the lease, assuming you cannot afford to pay cash, you will have leased the car and then continued with more monthly payments to buy the car.
3. Mileage Restrictions - Leases have mileage restrictions. If you drive more miles than the lease allows, you pay a penalty for every mile you go over. Many people find that they cannot drive their car the last few months of the lease, all the while making lease payments, because they cannot afford the expensive per mile overage fee.
4. Normal Maintenance - You may have to pay for normal maintenance items plus any damages. You will also pay the same insurance costs and personal property tax costs as that you would pay if you purchased the car. While you are not responsible for 'normal wear and tear,' sometimes you may disagree with the dealer about what is considered normal wear and tear, so be prepared to plead your case.