More Myths about Car Leasing

The leasing world has triumphs and defeats in its battle towards other forms of car ownership. But time and again, car leasing companies have to elbow in themselves in the crowd to assert the effectiveness of car leasing as an affordable and reliable form of car ownership.

We managed to come up with a set of the latest misconceptions that might be regarded as urban myths about leasing. It helps if you are well informed of what the majority thinks about car leasing in general.

The first myth is that leasing is always cheaper than buying a car. Relatively, leasing is quite cheaper since you only have to pay monthly for the depreciation value of the car as you use it through time. This is different when you decide to buy out the leased car at the end of the contract since if you’re going to sum up all the monthly payments and the buy-out price it will be much higher compared to a brand-new purchase.

Another myth is that the new disclosure laws give auto owners the full protection. Due to a lot of complaints about hidden fees in lease contracts, a law has been passed that requires dealers and leasing companies to accomplish a form of disclosure, providing lease details, most specifically the hidden charges for wear and tear, gap insurance, excess mileage, and others. However protective the law may appear, it should be known that the interest rates are not required to be disclosed by these dealerships. The fool-proof way of protecting yourself is to stick to a well-reputed licensed dealer.

The dealers can’t charge you after you returned your car at the lease’s end. This is entirely farcical since a lot of lessees have already complained about being charged for a dozen fixes right after they returned their car to the dealers after the lease. To make sure that you won’t fall on this trap, make sure to read the end of term conditions, to make sure what fees you need to take care of. It’s also a good idea to hire a third party to check on the overall condition of the car at the end of the car lease and come up with a vehicle report for the dealer to based on.

The fourth myth is that only rich people go into leasing than buying. This might be brought about by the fact that car leasing is for luxury cars only, which is not the case. The real thing about leasing is that what matters most is a good credit background and not the purchasing power of a prospective buyer. According to the book The Millionaire Next Door, by Thomas J. Stanley and William Danko, 80% of millionaires buy cars and not lease. Car buyers who are not really into the millionaire status are in fact more credible for a dealer for as long as he has a good credit background.

The last myth is that leasing has tax advantages than buying. The truth is that leasing has a friendlier way of calculating its taxes, making it easier to find out how much it’s going to cost you, hence, easier to accomplish payment or fix a deal for a certain cost.

Source: https://www.bankrate.com

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