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Last Updated on November 24, 2020
Consumer Reports on the Pros & Cons of Leasing a Car
Consumer Reports is an independent, non-profit membership-based organization whose mission is to inform purchase decisions, improve the products and services businesses deliver and drive regulatory and fair competitive practices.
With the emergence of leasing as a tool for mainstream consumers to have more car for less money, Consumer Reports took a look at the pros and cons of leasing a car. Here’s what the organization determined.
The Pros of Leasing
The organization found many reasons why leasing can be more appealing than buying. Monthly payments are usually lower because you’re only paying for the amount the car depreciates in the time you have it — plus finance charges.
The major advantages of leasing include:
- New cars are generally trouble-free.
- Warranties usually run concurrently to lease terms, so out of pocket expenses for maintenance and repairs are all but eliminated.
- A lower monthly payment puts you in a higher-priced, better-equipped car than you could buy outright.
- When the lease is over, you just give the car back and get another one — or move on to something else.
- Business owners can write lease payments off as tax-deductible expenses.
- When the lease is over, you take the car back to the dealer and that’s the end of it.
The Cons of Leasing
As good as all of that looks, leasing does entail some factors that might strike you as being less advantageous:
- You’ll pay more in the long run because it ultimately costs more to lease a car than buy one overall.
- You’ll make perpetual car payments if you lease one car after another. Meanwhile, if you buy a car and pay it off, you’ll drive payment free after a while — though you will then begin to incur maintenance costs.
- You’ll be limited to a set number of miles you can put on the car during the period of the lease. Agreements usually dictate 12,000 annually for mainstream cars and 10,000 per year for luxury cars. If you go over, you’ll pay an average $.25 cents a mile — though it can sometimes be more.
- You must agree to maintain the vehicle in good condition, otherwise you’ll be looking at paying wear-and-tear charges when you turn it in. If you have young children, or live in an area in which your car will be subjected to harsh conditions, this could present you with an added expense.
- Getting out of a lease early can cost you a lot of money. Therefore, it’s a good idea to be certain you want to keep the car for the period of time the lease agreement covers. Yes, you can find someone to buy you out of the car, but it isn’t always as easy as it seems. If other cars like yours cost less, who’d buy it?
- Personalization is frowned upon. Anything you do to make the car uniquely yours will have to be undone when you turn the car back in.
- You can often do just as well money-wise by purchasing a certified pre-owned vehicle from a new car dealer.
When you’re considering how to lease a car, keeping these Consumer Report thoughts on the pros and cons of leasing a car in mind can help you make the best possible decision. Further, the non-profit membership-based organization advises whether you get your new car with cash, a loan or a lease, choosing one that holds its value well, stays reliable, and gets good fuel economy is the smartest possible decision you can make.