You'll have more chances of saving lots of money if you choose leasing over buying a car on credit. In leasing, you pay less, no additional charges, and your money's not tied down for a long-term obligation.  Buying a car on credit can be very costly. Without knowing, a big part of your finances just go to the car payments plus interest rates and other credit charges.

 

However, leasing has its downsides as compared to the benefits when buying a car on credit.  The cons are:

 

1. Limited mileage.

 

Most often than not, leasing companies require you to stick with their mileage limits. If you exceed them, you'll likely have to pay for the charges.  Of course, if you don't exceed the normal 12,000 miles per year that are allowed, this isn't a downside at all.

 

On the other hand, you can drive as many miles as you want if it were your own car. You don't have to think about extra charges whenever you decide for a vacation getaway with your car.

 

2. You don't own the car.

 

As much as you think the leased car is yours, it’s not. You do not build up equity with a leased car contrary to what you do when you purchase one. You can't attach that roof rack or paint it purple and yellow if you want to, at least not without prior approval.

 

However, if you've decided to buy a car instead, you can customize it in any way you want.

 

3. Maintenance is a requirement.

 

Of course, maintenance is a must for every car to stay in its peak condition. Things are different when leasing. You have to keep it in good condition, whether you like it or not, or you could be charged with hefty fees as soon as your lease is over.

 

If it were your own, then maintenance wouldn't be much of a problem. It's up to you if you want it well maintained or not at no extra cost.

 

4. Poor credit may affect your approval for a lease.

 

Poor credit rating will adversely affect your chances of getting a lease. Indeed, bad credit affects you no matter if you're buying or leasing, but it's more of a dilemma when you're considering a solid lease plan. In this way, buying on credit is a better choice.  It's much easier to purchase and finance a car, especially if you can afford a reasonable down payment.

 

5. Calling it quits can be very expensive.

 

Getting out of a lease prior to its termination can be costly. Most leasing companies charge you with large penalties just for returning the car early.  Conversely, if you've bought it, all you have to do is to sell the car if you don't want it anymore.