Consumer Reports on the Pros and Cons of Leasing a New Car

When it comes to the process of buying or leasing a new car, Consumer Reports has some helpful tips to get you through the process. The decision to purchase or lease a vehicle is a big decision, but one option might make more sense than the other, depending on your financial situation. Check out the list of pros and cons below.

The pros of leasing a new car, according to Consumer Reports

Consumer Reports weighs the pros and cons of leasing a new car
Signs offering lease deals on new cars | David Cooper/Toronto Star via Getty Images

There are many good reasons for people to lease a car, Consumer Reports says. The monthly payments tend to be lower since you won’t be paying principal. Instead, you are just borrowing and repaying the difference between the vehicle’s value when new and the expected value when the lease ends. Plus, paying finance charges.

  • You get to drive the new car during the best and most trouble-free years.
  • The car has all of the newest technology, keeping you safe in an accident.
  • The new car is covered by a warranty should anything go wrong.
  • The lease might cover some maintence like oil changes and tire rotations.
  • Leasing a new car allows you to be in a safer and newer car than you might be able to afford otherwise.
  • There is no worry about the vehicle’s value fluctation or trying to sell it once the time comes.
  • Some buisness owners might see signifigant tax advantages.
  • When the lease is over, you simply drop the car off and move on.

Consumer Reports weighs the cons to leasing a new car

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While there are a lot of benefits to leasing a new car, there are also some disadvantages that should be made aware of. Consumer Reports has a few negatives that come with a lease on a new car.

  • At end of the lease period, you usually end up paying more for the vehicle than you would with a loan. This is because the first few years of the life of the car are also the years where it depreciates the most.
  • If you jump from one lease to another, the montly payments never end. In comparison, keeping the vehicle after the loan is paid off will give you more value overall. The best option is to buy the vehicle and keep it until it isn’t economical to keep it any longer.
  • Leasing a car comes with some stipulations, like miles. If you go over these specified miles, there is a penalty. That usually means paying for every additional mile. You don’t get a refund for unused miles.
  • You have to keep the vehicle in good condition and follow through with maintence. If you don’t, there will likely be fees to cover the damage or whatever else might have happened. Especially if there is a lot of damage.
  • If you decide not to continue with the lease for one reason or another, there will likely be a lot of fees associated with that decision. These are called early termination fees and will be due when you end the lease. These fees can amount to the cost of the full lease.
  • You still have to pay for items like tires, which are an added cost depending on the type of vehicle. If you get a more expensive or larger vehicle, the price of tires can be a lot.

The decision to lease a new car comes down to personal finances

Consumer Reports says leasing makes more sense for some people at the end of the day. It can get you into a nice, new, safe car that you might not be able to afford otherwise. It can also offer lower payments in some situations than buying the vehicle outright. Leasing a vehicle can also help you build credit if you make payments on time. It is pretty simple, and while you have to take the car in for maintenance, you don’t have to pay for it.

However, leasing doesn’t always make sense for people. If you have saved up and have found an affordable vehicle, leasing might not be the most budget-conscious choice. These days, buying a new car outright is more expensive than ever, though.

If you are in this position, try making your pros and cons list like the one Consumer Reports made. Weigh out the pros and cons of your situation and financial situation to see which option makes more sense. Either way, hopefully, you get into a safe new car that you can afford. Be sure to maintain your vehicle if you lease or own it to stay on top of things.

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