What are the pros and cons of leasing a car?

Question

In other words, why do people lease cars, and what are the potential draw backs of doing so ?

Answer 1

When you lease a car you pay for the depreciation over the period of the lease. Since you're not paying for the "entire" car, your payments will usually afford you a more upscale car than the same payments on a financed car. For business owners and if the vehicle is used for business purposes, the lease payments can be deducted from your income tax. Do check with your CPA on the specificities because I am not an accountant. When you purchase a car, you may not have the same tax advantages. Furthermore, you are losing the depreciation with the biggest loss occurring the minute you drive it off the lot. If you buy a car, try to get a zero interest loan; they do exist for people with high credit scores. Or, pay for it in cash. Another thing - I would do apart from paying cash for it, is to buy a demo. That demo will have a couple of thousand miles on the clock but save you a lot of money because it won't depreciate as much as the former.

Answer 2

We leased a car so we could try it out and have lower car payments.

Draw backs: you get charged for almost every little thing wrong with the car at the end of the lease, you have to watch your miles.  Both issues can be easily remidied if you decide to buy the car at the end of the lease.  However, you are stuck with the original agreed upon buy-out price when you sign the lease and it won't change regardless of what the market is doing for those vehicles.

However, we have enjoyed leasing our vehicle and decided to buy it out.  Which has given us lower payments all around.

Answer 3

The big drawback is that you end up paying a lot of money for a car that you do not own, and eventually have to give back to the company.  Also, there are mileage restrictions with HUGE fees if you go over the allotted mileage. If you own a company, it might be a good idea to lease a vehicle, because you can put the lease in the company name and write it off as a business expense on your taxes.  For a private owner...leasing is a bad idea.