Don't Make These Car Leasing Mistakes
If you're considering leasing a car, beware of these common mistakes and educate yourself before signing on the dotted line.
If you're considering leasing a car, but you're new to the process, beware of mistakes and educate yourself before making a deal. Do some research to find out if a lease is right for you, and avoid issues that will have you paying more than you bargained for. Following are some of the common mistakes people make when leasing cars.
Not shopping around
If you jump on the first deal you come across, chances are you're missing out on other, better deals. Take some time to explore your options before jumping on board with a lease.
Even when you have a good idea of what you want to pay for your vehicle lease, failing to initiate a negotiation could keep you from getting the price reduced. You might be missing out on a lower price without realizing it. If negotiations are unsuccessful, look elsewhere.
Opting for super-low monthly payments
Low monthly payments are enticing, but you'll probably pay more in the long run. You may have to pay more up front to get these low payments, and if there is a major accident or a theft, you will be out that cash.
Rolling owed money from a previous loan into your payments
It's rarely a good idea to roll money you owe from a previous loan into your new lease payments. This will not only increase your monthly payment, but will add to your total debt load.
Choosing a long-term lease
A short-term lease means not paying for maintenance and driving an almost-new vehicle the entire time. When you sign a long-term lease, you're essentially canceling out much of the appeal a lease has to offer. The newness wears off in the long-term, and you may be stuck with a car you'd like to exchange.
Not knowing potential penalties
There is a penalty for exchanging your car before the lease is up. Additional penalties exist, relating to mileage limitations and wear and tear. Be sure you have a firm grasp on any potential penalties before signing.
Not keeping up with maintenance
Leasing a car means not having to pay maintenance costs. That's part of the appeal. The reason this is offered is that you probably won't be in the vehicle long enough to put too much wear and tear on it. If you fail to take the car in for proper maintenance, however, you may not only experience car trouble, but also risk running into some of those aforementioned penalties.
Opting for unneeded accessories
When you're at the dealership, you're eager to drive off the lot with a new vehicle, and unfortunately, that can cloud your judgment. When you learn about the accessories that you can get for extra money, consider how badly you really want these extras. You'll be paying for them each month and may soon regret doing so.
Leasing a car
The actual leasing of a car might be a mistake itself. That's not necessarily the case, but you should weigh your options before committing.
"For most people, leasing doesn’t make financial sense," says Lou Carlozo, a personal finance contributor at Money Under 30, though he does acknowledge exceptions for business owners or others who can deduct certain vehicle costs. "For everyone else, leasing a car should be considered a luxury. Lease a car if you simply love driving a new car every three years and the cost is worth it to you. As long as you’re aware, it’s fine to make a conscious decision to spend more for your cars than might be necessary."1
If buying seems like the better option to you, apply for an auto loan. For information on auto loans from Nevada State Bank, visit nsbank.com.2
The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.