Leasing a new car instead of buying one makes a lot of sense — until you check under the metaphorical hood.
Here are some of the common, and costly, mistakes consumers make again and again, according to new-car dealers who spoke anonymously to Money Talks News:
Rolling negative equity into your payments
Yes, you can sometimes roll the money you owe from your past car loan into your car lease payments. But that’s often a costly mistake for many reasons, including higher monthly payments on your lease.
The main concern, though, is that you will allow the debt you carry to snowball. Remember, a new car is not a necessity, and going into serious debt for one is probably a mistake.
Signing a long-term lease
Car leases are basically meant to be short-term rentals in which you move swiftly through the cycle. Done right, it can make sense for some drivers.
However, leasing for 60 months or more negates many of the advantages of leasing. And if you turn the car in before the end of the lease period, you’ll often pay a sizable penalty.
Accessorizing the car
Sure, you can buy the high-end wheels, pinstripes and other packages to personalize the car you lease. But you shouldn’t.
Why invest hundreds or thousands of dollars in a car you don’t own? A car is transportation, and leasing allows you to pay less for the vehicle. Don’t waste your money on accessories.
Ignoring annual mileage
Many people leasing for the first time don’t track their annual mileage. They simply drive as much as they want. However, most leases cover a limited amount of mileage. If you go over that amount, you will likely be required to pay per mile of overage — which can add up to thousands of dollars if you’re not careful.
Not sure what’s right for you? Edmunds offers an array of free online calculators to begin your analysis.
What’s your experience with leasing a car? Share with us in comments below or on our Facebook page.
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