NEW YORK (MainStreet) — Though it should come as no surprise, leasing a car has become quite popular in the past few years. According to a online marketplace LeaseTrader.com, 25% of the marketplace is now comprised of first-time lessees.
“Previously, we would only see 17% or 18% of first-time leasers,” John Sternal, a spokesperson for LeaseTrader, tells MainStreet. “It goes to show that people are choosing to rent everything today.”
While the reluctance to buy a high-priced item is understandable, the inclination to lease a vehicle instead can be problematic if the consumer goes in misinformed. This is because, experts agree, leasing is primarily geared to one type of person.
“It boils down to how frequently you like to be in a new car,” Phil Reed, senior consumer advice editor for Edmunds.com tells MainStreet. “If you like to change cars every two to three years, then leasing is for you.”
While leasing gives consumers the opportunity to drive a car for the best three years of its life, it has some drawbacks people don’t realize. For instance, those who lease with the intent to buy will often pay more for the car than if they had purchased it initially.
“It could potentially cost more in the long run,” Sternal agrees.
Also, getting out of a lease you can’t afford can be a lot trickier than getting rid of a car you purchased. Generally, Reed explains, consumers are beholden to the terms of the lease unless they can get another driver to take it over.
“Ninety-nine percent of all leases are transferable,” Sternal says. He explains that some manufacturers will require that the first lessee remain on the contract as a guarantor, in case of a second default.
If leasing fits your lifestyle, MainStreet asked experts to break down what’s typically included in the fine print of a lease. Here are their tips and advice, along with some tricks for negotiating the best deal.