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Risks Associated with Used Car Leases
When you are choosing used car leases, please be aware that there are risks involved when doing so. Used car leasing does have its advantages such as lower monthly payments when compared to new cars, but there are also downsides.
- When you take on a used car lease, you have no idea what the retained value of the car will be at the end. The problem with this is that the monthly payments are determined by a value at the end, and not knowing what that may be can cause you to overpay in the long run.
- As with any used car, there are bound to be service problems over the life of the lease. It is just how used cars are, they are old, and this can cause problems. It is more of a matter of when, not if. To illustrate this, take this example from Consumer Reports. A three year old car has twice the amount of service problems than a one year old car does. Now imagine a car that is four, five or more years old. There are bound to be problems.
- With leases comes mileage limits. These are put in place to make sure that the car is worth something at the end. The more miles that are put on, the lower the value will be after your lease is up. Mileage limits are put in place so that you don’t go over them. If you do, you will have to pay some penalties, which are often very severe.
