Is it a bad idea to lease a car even when looking for a car for only short term purposes

Question

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

Answer 1

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.

Answer 2

I want to offer counterpoints to some of Aganju said, because that's not exactly the whole story:

• 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.

While it's generally expensive to end a contract early, it is however possible to sell your lease to a used car dealership--and just like any car depending on the model/condition/demand it's even possible to make money this way. For example, I signed a 3 year lease but had to move after 2 years (and couldn't bring the car). I was able to sell the vehicle lease to a dealer, and made a profit such that it covered my original down payment. Essentially, this means that I was able to lease a brand new car for 2 years with no downpayment.

• 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.

This varies by dealer and lease contract. This wasn't a requirement for me, however, oil changes through the dealer were free. Also, there was no other "required maintenance".

• 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.

This is true, and a good thing to keep in mind. However, this is negotiable at time of the lease if you think you may go over the allotted contract mileage.

• you must have full comprehensive insurance at all time, with no or very low deductible

This varies by state.

• 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.

This is true, but this is also true if you bought a car outright and tried to sell it--condition of course matters.

• 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.

This can be true, but this is also true if you bought a car outright and tried to sell it--condition of course matters. If you're a standard driver, this isn't likely to affect you though as normal wear and tear is often part of the lease.

-on the positive side, if you have a business, you can deduct the leasing payment every month directly.

This is a nice benefit.

You're also going to have a cheaper lease if you get a car that tends to have higher resale value, which makes sense.