Car Lease Pros & Cons - How to Make the Best Financial Decision

In 2015, I went to Toyota to look at cars. I was trying to purchase a car, but the monthly payments were too high. I was trying to purchase a new 2015 Toyota Camry.

We could not get the price low enough to a point where I could afford the monthly payments and all the other fees that come with the car. We asked about leasing and we were able to negotiate this down to $200 a month for a three-year lease with $2,000 down.

Pro - affordable monthly payments

So, I got a brand new 2015 Toyota Camry for $200 a month and that is what I had for three years.

I absolutely loved that car. I wanted to talk about the good things about leasing a car really quickly because, for me, I really liked the lower monthly payment.

At the time I was able to afford $200 a month and I was driving a brand-new car, so it was nice for me. I also wasn't sure what my plans were after the three years so it just worked at that time for me to lease the car for three years and figure things out later.

Pro - no charge for servicing

The other good thing about leasing a car is that all of your services are paid for. If there's any problem with the car, they will pay for it. If you have to get oil changes, they will pay for it. I can't remember the exact numbers, but it's a typical breakdown of when you're supposed to get your car serviced. So for three years, I did not pay any service fees.

Pro - always having a new car

The most obvious pro of leasing a car is that you constantly have a new car, which is nice because it looks nice, it smells nice, and it feels nice. You get all the new technology and all the new updates, which are typically nice. Usually, with the newer model of a car, they change a few things about the outside of the car every three years.

With my experience, I narrowed it down to three main cons.

Con - the overall cost

The first one is the cost. In general, if you're going to choose to lease a car over and over again, you're obviously going to be paying more. I know for myself that leasing the car did cost me a lot of money in the long run. Let me break this down.

My monthly payment was $200 and I had to pay that for three years. So that is $7,200 for three years total. Keep in mind, this is just a 2015 Toyota Camry, so nothing spectacular. I also put in a $2,000 down payment when I leased the car, so that's an additional cost.

When I went to buy out the lease, I learned that you cannot negotiate that price. After you pay your lease for three years, whatever price is left on the car, you have to pay.

What I had left was over $19,500, which was a pretty high amount. My monthly payment would have been pretty high as well.

Instead, we purchased a used Toyota Camry. Same exact model, the same year. I just got a white color instead of my red, but buying used was able to save me about $2,000. So the $7,200 I paid in monthly payments plus the $2,000 down payment, added to the $18,000 I had to use to buy the new (used) car is $27,200.

Also, there are fees associated with turning your lease car in. You wouldn't have to deal with this if you keep the car that you're leasing. When I turned it back in to the dealer, they took a look at everything and charged me for wear and tear.

For me, the wear and tear cost $320. There was also a disposition fee of $350, which is the fee for when you turn the car in. So I paid $670 total dollars in fees. That brings my total for a 2015 Toyota Camry to about $28,000, which is a lot in my opinion.

Con - always having a monthly payment

The second con, if you continue to lease, you will always have a monthly payment. It is typically lower than a purchased car but if you keep on leasing, you are always going to have a monthly payment rather than putting that towards investments or anything else.

Con - limited mileage

The final con that I experience is limited mileage. Mostly because I was commuting so far for college and then I was commuting a lot for work. I was nervous that I would have to pay extra for the mileage. Luckily I did not have to.

I think in a typical lease they give you 12,000 per year. If you go over the mileage, you have to pay a certain amount per mile over, which can really add up depending on how much you go over.

Final thoughts on leasing a car

Honestly, I would say leasing is not the worst thing in the world. I know a lot of people don't agree with that statement, but at the time, at 21, and 22 years old, that is what worked best for me.

I was able to afford a new car that I felt safe driving and that I truly loved. I probably would not lease again, and I know that in the future I will definitely save up and pay for a used car in full.

Leave a comment if you have ever leased a car, or if you're currently leasing, and how it has worked out for you. I’d love to hear your thoughts on leasing!