Car Leasing Myths Busted: The Truth About Leasing Cars
When it comes to financing cars, people often fall into two categories: those who lease cars and those who haven’t tried it. Having leased over a dozen cars in the last 25 years, I’ve heard every misconception imaginable. Yet, my experience has shown me how valuable car leasing can be when approached with knowledge and strategy.
Let’s break down some of the most common car leasing myths and uncover the truth behind them.
Myth 1: “Car Leasing Is Car Fleecing”
I’ve lost count of how many times I’ve heard, “Leasing is just a scam!” Most of the people making this claim have never leased a car. Sure, if you enter a lease without understanding the terms, you might end up with a bad deal. But the same applies to financing or purchasing a car.
When you lease, you’re essentially paying for the portion of the car’s value that you use. Plus, with manufacturer warranties typically covering most repairs during a lease, unexpected maintenance costs are minimized. The key is knowing how to negotiate lease terms and avoid unnecessary fees.
Myth 2: “My Accountant Says Leasing Is Bad”
While accountants are great at balancing books, not all are experts in car financing. Leasing can be a smart financial decision, particularly if you use the car for business. You may qualify for tax deductions on lease payments and operating expenses.
Additionally, cars are depreciating assets. The average vehicle loses around 50% of its value in 3 years. When you lease, you’re not stuck with the long-term burden of owning a car that’s rapidly losing value.
Myth 3: “When You Lease, You Don’t Own The Car”
True, but ask yourself—do you really want to own a depreciating asset? Unlike a house, which typically gains value over time, cars lose their value quickly. After paying off a five-year car loan, you’re left with an aging vehicle prone to expensive repairs.
With leasing, you enjoy a new car every few years without the stress of resale or declining value. Plus, maintenance costs are often limited to routine services like oil changes.
Myth 4: “Leasing Is More Expensive in the Long Term”
This myth assumes you’re planning to drive the same car for 10 years. If you’re someone who loves driving the latest models or values reliability, leasing can often be cheaper.
Consider this: Leasing typically offers lower monthly payments than financing. Plus, you’re avoiding long-term repair costs and staying under warranty. Even if you were to buy a car outright, the money you save upfront by leasing could be invested elsewhere.
Myth 5: “You’ll Get Hit With Excessive Fees at Lease End”
While it’s true that you could face fees for excessive wear and tear or exceeding mileage limits, these charges are avoidable. Most leases allow 12,000 to 15,000 miles per year with fees for exceeding this limit, generally around 10 to 25 cents per mile.
Pro tip: If you suspect you’ll drive more than the lease mileage limit, consider negotiating a higher mileage allowance upfront. And remember, keeping the car in good condition will minimize potential end-of-lease charges.
Myth 6: “Car Leasing Complicates Things”
Leasing might involve unfamiliar terms like residual value and money factor, but the concept is straightforward. You’re paying for the use of the car, not the entire vehicle value.
A simple comparison can help. Let’s say a new car costs $30,000. After a 3-year lease, it may have a residual value of $18,000. You’re only paying for the $12,000 difference, plus interest and fees. Many dealerships offer transparent lease agreements, making it easy to understand your costs.
Myth 7: “Leasing Isn’t for Everyone”
This one’s true—leasing isn’t a one-size-fits-all solution. If you drive more than 15,000 miles per year, prefer owning your vehicles long-term, or enjoy customizing your car, leasing might not be the best choice.
However, if you enjoy driving new cars, want predictable monthly payments, and prefer avoiding major repair costs, leasing could be ideal.
Final Thoughts
Don’t let common car leasing myths sway your decision. Leasing offers plenty of financial and practical advantages, particularly for those who value driving the latest models without long-term commitments.
Before you make your decision, check out our Best Value Leases Right Now for up-to-date, expert-reviewed deals. You can also explore our Car Lease Ratings to compare lease options and make an informed choice.
Happy driving!