7 Disadvantages of Auto Leasing

Leasing a car is not the best choice for everyone. Below are a couple of disadvantages of leasing

a car.

<h2>Constant Car Payment</h2>

One of the significant pitfalls of auto leasing is that you will always have a car payment to make.

Usually, plenty of lease contracts are about two or three years long. You will constantly have to

keep looking for a vehicle to lease every couple of years unless you choose to be vehicle-free or

buy a car. While the monthly payments on a lease are significantly lower than purchasing a new

vehicle, constantly making car payments may not be a viable solution.

<h2>High Insurance Costs</h2>

You will be charged a higher insurance cost when you insure a leased vehicle. This is because

most, if not all, leasing companies need to get high insurance coverage on the vehicle. As a

result, you will end up paying higher insurance than you would have paid if you had bought a car

instead.

<h2>Mileage Limit</h2>

When you lease a vehicle, there is often a mileage limit you have to adhere to per year. Usually,

the mileage limit is in place to reduce the wear and tear of the vehicle since it will be resold

when you return it at the end of your lease term. The typical range for most lease companies falls

between 10,000 miles to 15,000 miles yearly. You will be highly penalized at a very high rate

when you exceed the set mileage limit.

<h2>You cannot Make Modifications On a Leased Vehicle</h2>

When a company leases a vehicle to you, you have to return it in stock condition. This is because

lease companies usually sell the car afterward as a pre-owned vehicle. Therefore, they need the

car to be in good condition and have its original equipment. You can modify your leased vehicle,

but you will likely be charged an additional fee when you return it.

<h2>Getting Out of a Lease is Hard</h2>

Auto leases are quite binding, so getting out of one can be difficult. You have to pay off

everything you owe to get out of it. Otherwise, you will be stuck with the vehicle until the end of

the agreed term. Alternatively, you can find someone else and have them take over your lease. It

is also worth noting that you will be charged early termination fees when you end your lease

early, and you will have to pay the balance in a lump sum.

<h2>Needs Good Credit</h2>

If you have bad credit, you may not stand a chance at auto leasing. The majority of leasing

companies usually have a high credit score requirement. Your credit score also significantly

influences your leasing interest rate, meaning if you have a poor credit score, you will be charged

higher monthly payments than someone with a good credit score.

<h2>You Will Pay a Lot of Fees</h2>

Auto leasing involves paying so many fees it can be overwhelming. For instance, a $200

disposition fee is required at the end of your lease and a $400 acquisition fee. Additionally, there

are other fees you may be charged, like a wear and tear fee when you return the vehicle. It is not

uncommon for a leasing company to charge you a high fee for a small scratch. Therefore, you

have to be careful when using the vehicle during your lease term.
There are several other downsides of auto leasing, which make it a less favorable option for

many individuals.