For someone who has never leased a car, the act of doing so might seem a bit confusing. It is predominantly opted by individuals who cannot afford their car payments or business owners who deduct their car expenses. However, leasing a car has its share of merits and demerits. Here, we will discuss the pros and cons of leasing a vehicle. 

Pros

• Lower upfront cost
  As far as the upfront expense is concerned, you can get into the car with very few out-of-pocket expenses on leasing. Further, in leasing, either the down payment is meager or is non-existent. Moreover, there will be a very low sales tax charge, as you will have to bear tax only on the car’s value, which you actually utilized. 

• New car every few years
  When you lease a car, you can always get a new car after the lease term’s expiry. For a lot of people, it is an emotional boost.  

• Maintenance cost is less
  When you lease a car, you drive a new vehicle every time. So, you do not have to bear the   massive maintenance expense, which usually aggravates as the vehicle ages. 

• You pay only for the use
  Leasing is much like renting a car, wherein you pay the rent for a fixed period, say three to four years. So, you will only pay for the depreciation of the vehicle during the period of your use.  

• Tax advantage
  For self-employed professionals or business owners, leasing a car brings in tax advantages, as they can write off the lease amount as a business expense.

Cons

• There is always a liability
  When you lease a car, there will always be a car payment, which has to be made, as you will never really own the vehicle. So, anytime you do not make the payment, the dealership will recover the car. It will then be sold on auction. Moreover, if they sell the vehicle at a lower price than what you owe as per the lease agreement, you will have to bear the difference. 

• Mileage restrictions
  One of the most significant demerits of leasing a vehicle is the limits on distance and time. Most of the agreements will be for five years and allow only 60,000 miles. So, in case you travel beyond 60,000 miles, or if you keep the car for over five years, you will have to bear a penalty. Thus, leasing means always putting a budget on your miles. At times, it can be a bit stressful. 

• More expensive
  If you decide to buy the car at the expiry of the lease term, it would not be a good idea, as you would have already paid more than the value of the vehicle. So, as opposed to financing the car, leasing is more expensive. 

Analyze these pros and cons of leasing a vehicle and make an informed decision.