Much is said about car leasing and, being an expert financial consultant, it usually makes me angry and frustrated when half of what I read or hear is completely false. No wonder why people have the wrong idea most of the time. It is very difficult not to feel influenced by bad publicity when you are researching online, looking up information on financial products. But how to tell the difference between false and truthful advertising? Half of the time, it is very tricky.
Car leasing has been a victim of negative publicity for a long time. By this I do not mean that leasing is free from disadvantages, not at all. But its bad reputation is not entirely justified and overly exaggerated. This article seeks to discredit the most common myths associated to vehicle leasing.
Myth: Leasing Is Much More Expensive Than Buying
This is not necessarily true, it depends mostly on how much time you desire to keep the vehicle for. If you have a clear picture in your mind of what you want to do, then both deals can be equally beneficial. What is a fact is that, normally, lease terms offer more benefits to the applicant than most auto loans.
If you decide that what you want is to keep your car for many years after the loan is repaid, then buying would definitely be the best option for you. Leasing would force you to buy the car at the end of the lease contract, which would be far more expensive than buying it to begin with. On the other hand, provided that you like expensive cars you cannot afford, and enjoy changing the car model on a regular basis without having to go through the hassle of selling the it, then leasing is the option for you. In case you bought a vehicle only to resell it after two or three years, you would be losing money, as the asset decreases in value as time goes by.
Myth: It Is Too Risky, I Will Probably Get Scammed
Society is not characterized for being honest, this is a reality. And the financial world is not different. But you cannot assume that every single leaser out there is going to rip you off, that is just being irrational. There are many different ways to identify possible fraudulent leasers. As a matter of fact, there is one golden rule you must always follow: “if it seems too good to be true, it probably is”. In other words, use your common sense.
Myth: There Is No Way Out Of A Lease Contract
This statement is simply not true. There are always ways out of a contract, but most of the time they are very unfavourable, to say the least. If you decide to terminate the lease contract before it is due, you will have to pay an early-termination fee, which will be extremely pricy. What can be done in order to avoid the early termination of the lease contract, is to transfer it to another person.
As you can see, there are several car leasing myths which are not only false but also bad publicity. It is up to you to decide whether you are going to let them affect you or not.