Car leasing has many advantages when used in the right manner and if it follows the terms and conditions of lease agreement. But, car leasing also comes with a set of disadvantages and may tend to become a burden. In this article, we discuss some issues of car leasing that can be a burden.
Improper budget – When a person has leased a car for job purpose and due to some reasons has discontinued the job, then it will be a burden for that person to pay monthly lease payments.
Lease for long period – Leasing is a good option for those who lease the car for a maximum of 2 years. If the lease period extends for more than 2 years, then it is a loss for the leaser because he will be paying more than the purchase cost of the car.
Extra miles charged – There will be a limit of miles per year specified in the lease agreement. Generally, in US it is around 120000-150000 miles per year. If a leaser exceeds specified miles in contract, then he will be charged more to compensate those miles. It is better to include additional miles at the beginning of the contract.
Bargaining of price – Car leasing amount can be negotiated. Make sure you negotiate the price for a good deal because the lower the price, the lower will be your monthly lease payment.
Additional charges – When you lease a car for traveling or spending with family, you may carry some extra equipments that may not be included in the contract, in such cases you have to pay penalty.
Maintenance is not easy – When you lease a used car, the condition of the car may not support you through out the agreement. Sometimes, it may have some wear and tear. The owner will pay only for some damages, and for damages the are severe you will have to take the burden of getting it repaired.
No flexibility to terminate agreement – Once you enter into the lease agreement, you have to stick to it till the end. In case, if you want to terminate the agreement, you have to pay an extra amount.
No tax benefit – People who lease the car for personal uses have no deduction in tax unlike for those who use it for business purpose.
Debit/credit card blocking – Some companies block some amount in your debit/credit card for their safety. So you cannot use that amount till the end of the agreement.