Terms in this set (87)

+) Leases usually have lower monthly payments. When you lease you're paying for the difference in value of the car now versus the value at the end of the lease.

(+) Leases have fewer repair costs. Since your car is new, it will be under warranty over the life of the lease. If you own a car, your warranty will eventually end.

(+) Leasing also provides an alternative when buying a car is not an option. Most banks will not lend more than $30,000 for a car loan. If you are planning to acquire a car worth more than that, leasing may be your only option.

(-) You always have a car payment

(-) Leases have higher insurance premiums. Since you don't own the car, the leasing company gets to call the shots when it comes to insurance. They usually require more than the minimum state standards.

(-) Leases have restrictions. leases come with strict mileage limitations, usually 12,000 to 15,000 miles per year. If you exceed the total allowed miles by the time you return the vehicle, you'll be assessed a penalty -- which could be as stiff as 25 cents per mile. However, if you know or suspect that you'll be putting on additional miles, you can usually purchase extra miles in advance at a discounted rate.

(-)Leased vehicles must be returned in excellent condition, without dents, deep scratches, window cracks, or torn upholstery, and with all accessories in working order. Otherwise, you'll be assessed "excessive wear and tear" fees at the end of the lease period, and these can be steep.

(-) Lease payments never end. If you lease a car and then lease again, your payments never end. When you buy a car, you'll eventually pay it off.