Be honest- are you one of those people who just loves new cars? I knew it. That’s OK, we are in the same boat. I love new cars just as much as you do. But I like not overpaying just as much if not more than you do. That’s why, when it comes to car leases, I make sure and really get to know my options and whether I should be leasing or buying my vehicles. As I’ve learned (the hard way) a few times, there are all sorts of hidden costs involved in leasing a new car. And they aren’t what you think they are. Lets look at a few of them.
1) The monthly lease payment. Did you know that there are unscrupulous car dealers out there who will blindly rip you off if you let them. That’s right. And your monthly payment might have been arbitrarily made up by one of these dealers on the spot just by looking at you and deciding how much money they should charge you. Make sure and question everything on the lease form and ask in depth questions as to why you should be paying what you are. The fine print can be your friend, use it against the car dealer to negotiate a better deal somewhere else.
2) Keep an eye on your mileage. This is a biggie. A lot of people get wooed by the idea of a lease and it’s low payments. However, these same people are living the high life until the day comes when they have to finally return their vehicle. This is the day of reckoning because they get charge for overage miles. It’s not a pretty site and it can seriously damage your bank account. If you lease your car, make sure your mileage doesn’t exceed it’s limit.
3) The lack of equity. When you buy a car, you own it (or the bank owns the note on it). You don’t build equity with a car lease. Your car is basically being rented. Compare the equity costs and gains before deciding on a least.
There are a ton of other hidden costs involved in car leases that make points #1-3 look small by comparison. Learn all about them.
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