When deciding whether to lease or finance a new car, buyers should consider their financial situation, as leasing often entails lower monthly payments but no ownership equity. Leasing has become popular, illustrated by 62% of Lexus purchases being made through leases, benefiting manufacturers with customer retention. However, potential drawbacks include mileage limits and the absence of equity, making it essential for buyers to weigh their options before committing.

1. Should I Lease A Car

2. When it is time for us to buy a new car, most
of us are not able to pay cash for the vehicle.

3. That leaves buyers with two choices,
financing or leasing.

4. For those choosing to finance their
purchase, in recent years the terms of those
loans have been getting longer and longer.

5. With this longer period of financing the
purchase comes lower monthly payments,
but over the length of the finance period the
buyer will end up paying more in interest on
the loan.

6. When You Lease A Car You Are Not The Legal
Owner

7. So many buyers have been turning to leasing
their new car, which in essence is really just
another way of financing their purchase.

8. The biggest difference is that by leasing a
vehicle you are never the legal owner of the
vehicle, you are by law the lessee.

9. This form of purchasing a new vehicle has
become so popular, that so far this year 62%
of individuals who purchase a Lexus model
have done so by signing a lease for the car.

10. From a strategic standpoint for auto
manufacturers, when an individual purchases a
vehicle with a lease period or 24 to 36 months,
they often turn around and lease another vehicle
from that same manufacturer.

11. This leads to very valuable customer
retention for the auto maker.

12. There are drawbacks to leasing that buyers
need to be aware of before they lease a car
and sign the dotted line.

13. Determine How Many Miles You Drive
Before You Lease A Car

14. With a lease comes mileage limitations or
restrictions that typically are set at either
9,000, 12,000 or 15,000 miles.

15. When I am in a cab, I sometimes watch the
meter as the cost of the ride accumulates for
every quarter of a mile driven.

16. If you sign a lease and go over the number
of miles agreed upon in your lease contract,
your vehicle kind of becomes a cab, because
for every mile you drive above that agreed
upon figure you will be paying a mileage fee.

17. If you don't estimate your mileage needs
properly going into the lease, these mileage
overage charges can mount up quickly and
can end up costing you dearly.

18. I have owned my car for eleven years and it
was paid off years ago.

19. I have equity in it and if I choose to sell it
today I would be able to retrieve that equity
through the sales price.

20. With a leased vehicle you are essentially just
renting the vehicle and you are not building
up any equity.

21. When the lease is over, you either start the
process over by signing a new lease, or you
finance your new purchase, both of which
come with new monthly payments that you
must make.

22. The question of should I lease a car is one
with pros and cons and one that can only be
answered after weighing your options and
choosing the one that you feel works best
for you.