The pros of leasing a vehicle include lower payments, fewer repair costs, no trade-in hassles and the ability to drive new cars regularly, notes Edmunds. The cons include mileage limits, wear-and-tear charges at lease termination, greater expense in the long run and not owning the vehicle.Continue Reading
Leasing a vehicle is usually cheaper per month than buying the same vehicle. This means consumers who lease either have a lower payment or have the option of getting a more expensive vehicle for a lower monthly cost, explains Edmunds. Drivers also save money upfront with a lower down payment than is normally required to purchase a vehicle. The warranty that comes with a lease generally covers most repairs, meaning little or no cost for repairs during the lease. At the end of the lease, the consumer simply turns in the car instead of negotiating trade-in values or selling it privately.
A drawback for some consumers is the lack of equity in the vehicle, according to Bankrate. The consumer doesn't get anything out of the vehicle in the end. When purchasing a vehicle, the consumer can sell or trade in the vehicle to get some money out of it. While the consumer does enjoy new vehicles every few years, this also means always having a car payment. A consumer who purchases a vehicle has the option to continue driving it after paying off the loan.Learn more about Credit & Lending