I mentioned in a previous post that my sister in law just got a new car. For a while there, she was talking about leasing a car, and like any good PF blogger big sister, I was all “Whoa…hold up!”
It turns out, there could be some good arguments for leasing even though I’d never do it myself (and even though she didn’t do it either.)
It starts off with a very low or no down payment, which extends to lower monthly installments and different warranties. For people who regularly like to change their cars (e.g. in 3 to 5 years), leasing is the perfect opportunity. You can try out a nicer car than you would have bought without it, anything from BMWs to Ford SUVs. If you work in sales or real estate and use your car to drive clients around, you could possibly make an argument for that.
Or, if you know you will be leaving the country soon, like we did when we moved to Grenada or if you have a spouse in the military, leasing could be a good short term option (but it also locks you in, so you have to time it just right.)
Getting a car on a lease is relatively easier than getting a car loan and allows you to enjoy any car’s optimal years of performance and later move on to another, better or an upgraded car. However, let’s not forget that, even if you have been leasing a vehicle for ten years, you will have nothing to show for it the moment your payments stop. Also, there are terms and conditions that limit the car’s use, starting with the fact that every extra mile beyond the agreed mileage costs extra, so it wouldn’t work for big time commuters.
Ultimately, leasing could work for many different living situations and lifestyles, and it is particularly ideal for those who move around a lot for work or pleasure, or don’t want to worry about the hassle of upkeep.
But, since I don’t fall into any of those categories and I don’t mind driving an old car, I won’t be worrying myself with a lease (although I’m now less skeptical of those who do if it’s for a legitimate reason.)
I know this is a hot topic in the pf community, so what do you think? Are there any redeeming qualities when it comes to a car lease?