The Risks of Car Lease Takeover »

The Risks of Car Lease Takeover

As appealing as car lease takeover sounds, there are still some risks that a lessee should take note of. One, is the chance of service problems. A study said that a 3-year old car has more than twice the problems as a one-year-old car has. Any repairs that's not covered by the warranty, comes out of one's own pocket, even if the car has been in your hands for three months or so. It's probably a good idea to purchase a comprehensive, bumper-to-bumper warranty to cover the full car lease term.

Another risk associated with car leasing is that it's difficult to predict what that car (the leased vehicle you're about to take over) will be worth when it's, let's say, five years old.  The retained value of the car after 5 years is an important factor in determining your monthly payments. If the retained value is set too low, your monthly payments will be higher however if it is set too high,  it gives the dealer the latitude to push up the car's initial price while offering what seem to be an acceptable monthly payment.

The best vehicles to lease, therefore, are those that hold their value supremely well - such luxury cars, sports cars, and some high-end SUVs.  As a result, used-car leasing has become largely the district of a handful of luxury makes such as BMW, Lexus, and Mercedes-Benz.

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