I am looking to buy my first vehicle and I was convinced that a leased car would be better option due to lesser upfront costs, lower paymnets and an option to buy the car at the end of the lease.

However, I came across this post

Because the main topic of the post was not leased cars, can someone elaborate why buying a leased car is a bad option.

What are the hidden fess if any. And does it stack up against buying a new one.

I went through articles online and the biggest point there is you will not have a car after the lease expires. However I am looking for a temparory option here. So apart from that are there any other things I should check or be concerned about ?

I havent decided on the car yet, But I am targetting Audi or BMW

  • Question unclear. Leasing a car is a bad option for what? In other words, whether this is a good option or a bad one depends on your goals, constraints and such. – void_ptr Apr 10 '18 at 23:54
  • @void_ptr Edited the question – john Apr 10 '18 at 23:56
  • Buy an inexpensive used car for $1000 - $2000. You'll be so far ahead you'll be amazed. – Fattie Apr 11 '18 at 0:07
  • 1
    Amazed at how every time you take the car in to get serviced, it needs $1000 worth of work. – JTP - Apologise to Monica Apr 11 '18 at 0:36
  • @JoeTaxpayer if he needs it for says 6 months only, he shouldn’t bother taking it to the shop at all. Just use it for 6 months and consider it sunk cost, or try to sell it of for as much as possible. – ssn Apr 11 '18 at 4:39

Leasing a car is not automatically a bad option, but you need to understand the consequences when you sign the contract.

  • it is generally very expensive if you want to end the contract early; often you can’t, so you’d end up having to keep paying, even though you are moved away, and have too to pay for storing the car in a garage; or worse.
  • you are required to have all standard maintenance done, at the prescribed intervals, at the official dealership, or you get hefty fees tacked on. Those maintenances tend to be not cheap.
  • if you drive more than the preallocated mileage, you have to pay extra; that can quickly add up to significant amounts - for example, returning it with 90000 miles instead of 60000 miles could cost 30000 x 40 ct = $12000 extra.
  • you must have full comprehensive insurance at all time, with no or very low deductible
  • you have to return the car right after the lease period, and any dent or scratch or stain will be estimated, and you will have to pay for that.
  • when returning the car, you will have to pay for any parts that they consider ‘overly’ used, like brakes, transmission, etc; if you are a sporty driver, this hits you easily.
  • on the positive side, if you have a business, you can deduct the leasing payment every month directly.

Not all listed points are true for every contract, and they might have invented other traps; but those are the main points you should be aware of.

Consider that the company offering you the leasing takes on some risk, and wants to make money too; so leasing must cost you what buying would cost you plus what that company wants to earn.

| improve this answer | |
  • Thank you. Quick clarification, Isnt maintaninece covered in warranty ? And is maintainence requried even the car doesnt need it – john Apr 12 '18 at 1:08
  • Warranty means stuff breaks that is not supposed to break, and that might be covered. Maintenance is standard procedure for checking overall functionality and replacing stuff that gets used up in normal use, like oil, break pads, etc. - if it is your car, and you think you know it is not required, you can skip it. The point here is that the Leasing Contract might require you to do it anyway. Potentially, it says they decide what is needed. – Aganju Apr 12 '18 at 5:07

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.