10 Reasons Not to Lease a Car and Keep Your Options Open

Leasing a car might seem like a great idea, but it's not always the best choice. You'll be limited to a certain number of miles per year, which can add up quickly.

For example, if you're allowed 15,000 miles per year, exceeding that limit can cost you $0.25 to $0.40 per mile. That's a hefty fee for driving to work or running errands.

Here are ten reasons not to lease a car and keep your options open.

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You don't own the vehicle, so you can't customize it. This can be a major drawback for those who like to personalize their ride.

Mileage overage can be expensive. You'll be required to pay hefty penalties when you turn your vehicle in if you go over your mileage limitations.

Early termination fees can be a surprise. If you decide you don't like the vehicle and want to turn it in before the end of your term, you may have to pay these fees.

You essentially pay for 50% of the total cost of the vehicle over the first three years, which can result in higher overall costs compared to purchasing a vehicle.

Here are some common drawbacks of leasing:

Leasing a car can be a costly endeavor in the long run. You'll likely end up paying more than if you had purchased a vehicle outright. This is because the long-term costs of leasing can add up quickly, making it a less financially savvy choice.

Leased cars often come with higher auto insurance premiums. This is because leasing companies dictate the standard insurance coverage you must have, which can be more expensive than what the average consumer chooses.

Registration fees can also be higher for leased vehicles. Some states charge more for leased cars, and you may even be required to pay sales tax on the entire value of the vehicle, including the down payment, monthly lease payments, and taxes added to those payments.

In fact, leased cars may even come with additional taxes to pay at signing, such as county and city taxes specific to your jurisdiction.

Worth a look: Leased Car

Leasing a car can be a rigid commitment, leaving you stuck with a contract that no longer suits your needs. Lease contracts typically last for two to three years, during which time you're committed to the terms of the agreement.

If your circumstances change unexpectedly, such as a job relocation or a family addition, you may find yourself stuck in a lease that no longer meets your needs. This lack of flexibility can be frustrating, especially if you're not able to adjust your lease to accommodate your new situation.

You'll have to carefully consider your driving habits and estimate your mileage before committing to a lease, as exceeding mileage limits can result in costly penalties.

A different take: High Mileage Car Lease

If you have a long commute or enjoy taking road trips, leasing a car can be a huge drawback.

Leasing contracts often come with mileage restrictions that can result in costly penalties if exceeded. Exceeding these limits can be a significant financial burden, so it's essential to consider your driving habits before committing to a lease.

Imagine driving home with a shiny new lease, only to feel like you need to park it in the driveway for the last year or six months because you've gone way over on miles.

Broaden your view: Personal Car Lease

Leasing a car can be a great option for some people, but it's not for everyone. If you're someone who loves customizing their vehicle, leasing might not be the best choice.

You get what you get when you lease a car, and that means you can't make significant modifications to the vehicle. Aftermarket upgrades or alterations are typically prohibited in lease agreements.

If you enjoy personalizing your ride, you might be disappointed to know that leasing limits your ability to make changes. You can't even add bumper stickers or window tinting without facing penalties when you return the vehicle.

Leasing agreements expect the car to come back in the same condition it was in when you picked it up, with only predictable wear and tear. That means no fuzzy dice in the rearview mirror, and no modifications that can't be easily removed.

If you're thinking of purchasing the vehicle after the lease is up, keep in mind that you still won't have full ownership. You'll need to return the car to the dealership at the end of the lease term, and you may not have any equity in the vehicle.

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Leasing a car can lead to a never-ending cycle of expenses. You'll pay more for auto insurance, with some states charging more registration fees for leased vehicles.

One of the most significant ongoing expenses is the high interest rate associated with leasing. This means you'll pay less towards the loan principle, making it more expensive when you decide to buy the car at the end of the lease.

Here's a breakdown of the extra fees you can expect to pay:

These fees can add up quickly, making leasing a car a costly and frustrating experience.

Making a car payment every month for the rest of your life is not a sustainable or desirable situation.

You'll always have a monthly payment when you hop from lease to lease, as mentioned in the article, "You'll always have a monthly payment when you hop from lease to lease."

The long-term costs of leasing can add up, and after multiple lease cycles, you'll find yourself paying more than if you had purchased a vehicle outright, just like the example that says "After multiple lease cycles, you’ll find yourself paying more than if you had purchased a vehicle outright."

Having to make a car payment every month for the rest of your life means that money could be spent on vacations, schooling, home improvements, or saving up for your next hot rod.

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You'll be responsible for paying all maintenance costs during the lease term, which can add up quickly.

The leasing company expects normal wear and tear, but anything beyond that will be penalized, resulting in additional fees and fines.

If you neglect to follow the basic maintenance schedule, the financing company may consider it a breach of your lease contract, leading to more penalties.

You'll have lower monthly payments with a lease, but you'll pay more interest, which means you'll pay less toward the loan principle.

For example, when my husband turned in his lease, they offered to let him buy it for $23,000, but a similar vehicle with similar mileage was $2,000 to $3,000 less.

Here's a breakdown of the extra costs you might incur:

It's essential to consider these long-term costs when deciding between leasing and financing a vehicle.

Breaking a lease is expensive, and it's not just about the loss of your monthly payments. If you miss payments, your credit score gets hit.

For another approach, see: Can You Claim a Lease Car on Taxes

You'll also face a hefty fee for early termination of your contract on the lease. This fee can add up quickly.

The leasing company will make you pay the rest of the lease, as you agreed when you signed the contract. They won't care about your personal circumstances and will expect you to pay the balance immediately.

You'll be expected to pay the rest of the lease, even if you can't afford it.

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Auto insurance and registration fees can add up quickly when leasing a car. Higher insurance costs are often required by lease agreements, which can result in higher premiums.

Leasing companies and dealers can dictate how much insurance coverage you need, and you'll have to stick to that standard, which is often more expensive than what the average consumer chooses.

Some states charge more registration fees for leased vehicles, and these fees can vary depending on your location. You might be surprised at how much extra you'll pay.

Leasing companies can also charge sales tax on the down payment, monthly lease payments, and the entire value of the vehicle. This can add up quickly, and you'll need to factor it into your budget.

Here are some examples of how leasing companies might charge sales tax:

These extra fees can be a surprise if you're not prepared, so be sure to do your research and factor them into your budget before signing a lease.