The Pros And Cons Of Leasing A Car


Kojo Jumah


The creator and driving force behind Gentleman's Division. Kojo is ...

There are a number of finance options when you buy a car such as paying in cash. This is something that you need to consider based on your personal situation, but it may not always be the best option. The value of your car will decrease rapidly and if the car has any faults, you might regret using your savings on something that becomes a liability.

You also have the option of a hire purchase, a personal contract plan and a personal loan. However, each of these options comes with pros and cons that you need to know about. The use of these options will also depend on your current financial situation. However, if you are looking at buying a car, you should also consider leasing from a business like This is a finance method that has been associated with business vehicles, but can be used for personal vehicles.

The Basics Of Leasing

When you lease a car for personal use, you will be entering a contract with the leasing company. This company will generally be working with the showroom where you view the car. Before entering the contract, you need to know the period of the lease, the initial deposit, the monthly rates and the other terms and conditions.

The leasing period will generally be 2 to 4 years. The leasing company will generally not be flexible with this time period. This is why you need to know the lease term for the vehicle that you are looking at getting. There are some companies that offer estimates for 2, 3 and 4-year terms. The 3-year lease will generally be cheaper than the 2-year and the 4-year will often be cheaper than the 3-year.

The deposit you have to pay will often be the equivalent of 3 months payments. Of course, you should always confirm this before you sign any contracts. The monthly costs will also vary depending on the vehicle that you want to lease. If the monthly payments seem a bit high, you should ask for an estimate for a different model. A rough guide for this cost will be that the more expensive the cash price, the higher the monthly payments will be.

While the monthly payments are important, you also need to look at the terms and conditions of the lease. One aspect to look at is the annual mileage limit. This could be 10,000 miles, but it will vary depending on the lease and the company. If you exceed this limit, you will have to pay a penalty based on the extra mileage.

You should also find out if the leasing company will be selling the car at the end of the leasing period. You may not want to buy the car at the end of the lease and want to start a new lease instead. However, if the car is good, you might want to consider keeping it after the lease period.

The Pros

There are a number of benefits that come from leasing and the most significant is that there are predictable monthly costs. You will also generally have a low deposit which is a good option for people who have limited funds. When compared to hire purchase and personal contract plans, leasing is generally a good option.

Another pro is that you will be driving a new car and that you can change this at the end of the leasing period. This ensures that the vehicle you are driving is always under a warranty.

The final benefit of leasing is that you will not have to pay a lump sum at the end of the term. You simply have to give the vehicle back to the company if you do not want to buy it.

The Cons

The primary problem people have with leasing is the fact that they do not own the car. The vehicle will belong to the leasing company and the only way to own it is to buy it at the end of the leasing period. This is not always possible depending on the company that you work with.

Leasing a car can be expensive over the long-term when compared with buying one outright. However, you will need to weigh this against the benefits of having a new car every 2 to 4 years.