Leasing: Benefits & Drawbacks
The comparison below can help you decide if buying or leasing a car is best for you. Click on each item to learn more.
Potential Benefits
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A new car
Consider leasing if you enjoy having a new car with the latest features every few years – even though you won’t actually own it. -
Lower monthly payments
Monthly lease payments are often lower than loan payments because you’re only paying for the depreciation of the car during your lease – not for the car’s full value. -
Easy transition
You’ll avoid any trade-in or selling hassles when it’s time for another car.
Potential Drawbacks
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Fees for damage
If you lease, it pays to maintain your vehicle in top condition. You may have to pay the dealer extra for even minor damage. -
Excess mileage charges
Your lease agreement will specify how many miles are included. At the end of the lease, you may be charged 15 to 20 cents or more for each mile above this limit. You can usually pay for extra miles ahead of time at a lower rate. -
Fee for early termination
By signing a lease, you are making a commitment to pay for a certain period of months. Dealers typically charge a high fee if you end the lease early.
If you plan to buy a car, it’s critical to understand the concept of depreciation. Click the Next button to learn more.