Myers Volkswagen helps you make the right decision
The benefits of leasing
On the surface, leasing can be more appealing than buying as it presents a number of benefits. Monthly payments are usually lower because you're not paying back any principal. Instead, you're just borrowing and repaying the amount that the car depreciates in the time you have it.
Here are the major advantages of leasing:
- You drive the car during its trouble-free years.
- You're always driving a newer vehicle that is usually covered by the manufacturer's warranty.
- Your vehicle will always be equipped with the latest vehicle technology and safety features.
- You don't have to worry about fluctuations in the car's trade-in value or go through the hassle of selling it when it's time to move on.
- In the event of an accident, you don’t need to worry about the depreciated value when it’s time to trade it in.
- There could be significant tax advantages for business owners.
- At the end you just drop off the car at the dealer.
The disadvantages of leasing
As attractive as a lease may appear, there are a number of disadvantages:
If you lease one car after another, monthly payments go on forever. By contrast, the longer you keep a vehicle after a loan is paid off, the more value you get out of it.
Opting for a longer-term loan of six to eight years may bring your monthly payment close to that of a lease. At the end of which, the car is yours!
Lease contracts specify a limited number of kilometers. If you go over that limit, you'll have to pay an excess mileage penalty for every additional kilometer. Unfortunately, you don't get a credit for unused miles.
If you don't maintain the vehicle in good condition, you'll have to pay excess wear-and-tear charges when you turn it in. So if your kids tend to be a little messy with their juice, your teenage driver can’t stay away from cement blockers, or your vehicle is a magnet for parking lot dents then you'll have to pay extra.
If you need to get out of a lease before it expires, you may be stuck with thousands of dollars in early termination fees and penalties—all due at once. Those charges could equal the amount of the lease for its entire term.
With a few exceptions, such as professional window tinting, you need to bring back the car in "as it left the showroom" condition, minus usual wear and tear, and configured like it was when you leased it. Which means if you add a lift/leveling kit or even roof racks they must be removed before returning to the dealer.
