Leasing a car can be an attractive option for many drivers, offering lower monthly payments and the opportunity to drive a new car every few years. However, there are common pitfalls that can turn what seems like a good deal into a costly mistake. Here are five of the most common car lease mistakes and how to avoid them:
1. Not Understanding the Total Cost of the Lease
Many car leases are advertised with a low monthly payment, but that payment may not tell the full story. In addition to the monthly payment, you may have to pay a variety of fees, including down payments, taxes, registration fees, and acquisition fees.
How to Avoid It:
Before signing anything, ask for a detailed breakdown of the lease terms. Make sure you understand all upfront costs, including any down payment or fees, and calculate the total cost of the lease (monthly payments plus any fees) over the life of the lease. Compare this total to what you would pay if you were buying the car.
2. Leasing a Car That Doesn’t Fit Your Needs
A car lease is a long-term commitment, usually for 2-4 years, and if you choose the wrong car, you could be stuck with it for the duration. Many people lease cars that are either too small or too large for their needs, or they pick a model that doesn't hold up well over time.
How to Avoid It:
Carefully evaluate your lifestyle and needs before selecting a car. Think about things like the number of passengers you typically carry, your driving habits, fuel economy, and how often you plan to drive long distances. It's also helpful to research the reliability of the car over time.
3. Ignoring the Mileage Limitations
Leases often come with strict mileage limits (e.g., 10,000 to 15,000 miles per year). If you exceed the agreed-upon mileage, you’ll be charged for every extra mile—sometimes at a rate of 15–25 cents per mile, which can add up quickly.
How to Avoid It:
Estimate how many miles you’ll be driving each year before signing a lease. If you think you’ll exceed the standard mileage limit, negotiate for a higher limit up front. Some dealers may offer slightly higher limits for a nominal increase in the monthly payment. If you go over the limit anyway, you’ll be better prepared.
4. Overlooking Wear and Tear Charges
When you return the car at the end of the lease, the dealer will inspect it for damage, and you may be charged for anything considered beyond “normal wear and tear.” This can include scratches, dents, and tire damage.
How to Avoid It:
Take good care of the car during the lease. Regularly wash and maintain it, and keep it in good condition. When you return the car, ask for a detailed explanation of what constitutes “normal wear and tear” so you can avoid unnecessary charges. Some leases also offer wear-and-tear protection packages, so consider purchasing this if you’re concerned about damage.
5. Not Negotiating the Terms
Just like when buying a car, many people think that the terms of a Car Leases Under $200 a Month no Money Down are fixed and non-negotiable. In fact, the terms can often be adjusted—such as the interest rate (money factor), the down payment, and even the mileage limits.
How to Avoid It:
Don’t accept the first offer you receive. Research and negotiate the various aspects of the lease to secure the best possible deal. This could involve negotiating the capitalized cost (similar to the "purchase price" of the car), the money factor, or additional options or warranties. If you’re not familiar with leasing terminology, ask for clarification, or bring along a friend or family member who has experience with car leases.
Bonus Tip: Leasing vs. Buying
Leasing isn't always the best option for everyone. If you tend to drive a car into the ground or want to own your vehicle long-term, buying may be a better option for you. Weigh the pros and cons of each option, and don't be afraid to ask the dealer for a comparison of leasing vs. buying the same car.
By keeping these common mistakes in mind and doing your homework, you can make a car lease work to your advantage and avoid any unwanted surprises.