10 Reasons Not To Lease A Car

The two main ways to get into a car is to either purchase one or lease one.  Although in some situations leasing can be a good option, there are also reasons to avoid leasing a car.

This article will discuss 10 reasons not to lease a car to help you decide if leasing a vehicle is right for you.

10 Reasons Not To Lease A Car

While leasing a car has some benefits there are also several reasons not to lease a car such as penalties for excessive mileage and excessive wear. Another reason not to lease is that you do not have ownership of the vehicle and therefore cannot modify the car or trade the car in when it is time to replace it.

How Leasing A Car Works

To understand some of the reasons not to lease a car, it would be helpful to first have a brief overview of what a car lease is and how it works.

A lease is similar to a long-term rental of the vehicle. Once you make the down payment, execute the lease agreement, and make your monthly payments, you now have the right to use the vehicle for the term of the lease.

As vehicles age and are used their value decreases (depreciates). When the dealership structures your lease deal, they have calculated what they expect the value of the car to be at the end of your lease given the depreciation attributed to age, mileage, and normal wear and tear.

The down payment and the lease payments that you make on a monthly basis add up to roughly the same amount that the car will depreciate as you have used it over the term of your lease.

Once your lease term has expired it becomes time to return the vehicle. As you are returning the vehicle you will more than likely be offered the option to return the car or to purchase the car.

When you return the vehicle, the dealership will perform an inspection of the car and assess penalties for damage to the vehicle and mileage overages in addition to disposition fees. If you choose to keep the car, the dealer will quote the price necessary to purchase the vehicle.

10 Reasons Not To Lease A Car

Below we will discuss the ten most common reasons people decide not to lease a car:

1. Possible Penalties For Damage

One reason not to lease a car are the penalties charged for damage to the vehicle.

When you lease a vehicle, the lease terms take into account the normal wear and tear of the vehicle. In instances where the dealer determines that the wear and tear to your vehicle is excessive, they will often charge damage penalties.

Having to pay damage penalties because you carelessly damaged the vehicle is rather understandable. However, there are instances where the car may be damaged through no fault of your own.

Such as when an inconsiderate person parks next to you and flings their car door open striking your car and leaving a ding or dent.

Or when your car is parked and someone is attempting to parallel park behind you, tapping your leased car’s bumper with each maneuver of their car, leaving a series of dimples in your bumper.

In these instances, while the damage was not caused by the person who is leasing the car, the person leasing the car could still have to pay the penalty for the damage.

2. Penalties For Excessive Mileage

A second reason not to lease a car is the mileage penalty.

When you lease a car, the terms of the lease permit a certain number of miles to be driven per year. This number of permissible miles to be driven each year is often referred to as your mileage allowance or mileage limit.

If you exceed your mileage allowance the dealership will often charge you a mileage penalty for each mile that you have exceeded the mileage allowance. This mileage penalty is often between 15 to 25 cents per mile.

3. Inability To Trade The Vehicle

Another reason not to lease a car is that you will not own the car after you have finished making the scheduled payments.

For many of us, trading in an old vehicle when it is time to purchase a new vehicle is a great way to reduce the amount that we will have to finance or provide in cash to purchase the new vehicle.

If you have leased your car, trading in your old car to offset some of the cost of your new car will not be an option since you do not own the car that was leased.

Woman Leasing A Car

Even though you have made monthly payments while leasing the car, these lease payments just provide you the right to drive the vehicle during the lease period but do not lead to ownership of the vehicle.

For some car buyers, the inability to trade the car in at the end of their use is a big reason not to lease a car.

4. Inability To Modify The Car

A fourth reason not to lease a vehicle is the modification restriction.

In many lease agreements, there are clauses that restrict the person who is leasing the vehicle from modifying the car.

In the event that the car has been modified during the lease period, the dealership often charges hefty penalties after the car is inspected at the end of the lease.

5. Paying To Return The Car To Stock Form If Modified

There are some people who like to modify their cars and have found a way to do so even if the car is being leased. One way that these people avoid the modification penalty is to return the car to its stock form before returning the car at the end of the lease.

While this approach may prevent you from having to pay the modification penalty, it can also come with a cost.

One of the biggest costs associated with this approach is having to double pay for work to be performed.

The person leasing the car would first pay for the car to be modified and then before returning the car at the end of the lease, pay for the modifications to be removed in order for the car to be returned to its stock form.

Another cost would arise if any part of the car is damaged as the modifications are being removed since the person would either have to pay the penalty for damage or pay for the parts and labor to repair the damage.

6. Disposition Fees

Another reason not to lease a car is the disposition fee.

The disposition fee is a fee that is charged upon the return of your leased car that supposedly covers the cost of cleaning/reconditioning the vehicle in preparation for the dealer to sell it as a used car.

One aspect of this fee that is a reason not to lease a car is the amount of the fee. The disposition fee is often $300 to $500.

Another reason is that while the disposition fee is charged upon the return of the vehicle, the dealership often does not recondition the car.

At best in many of these instances, despite charging the disposition fee for reconditioning, the dealership pockets the disposition fee and merely gives the car the same car wash and vacuum treatment that they provide to you for free as a courtesy when you have your car serviced.

7. Maintenance Requirements

This seventh reason not to lease a car is due to the maintenance requirement.

In a lease, there will typically be a clause that requires the person who is leasing the vehicle to have the car regularly serviced and maintained as recommended in the owner’s manual.

Therefore, whether you are leasing or buying a vehicle, you are paying for the regularly scheduled maintenance, thus, leasing the car is not a cheaper maintenance alternative.

8. Penalty For Missed Maintenance

The eighth reason to not lease is that there can be a penalty assessed if the regularly scheduled maintenance has not been performed.

Often embedded within the lease’s maintenance requirements are penalties that will be assessed if the scheduled maintenance is not performed.

In some leases, the penalty for not performing the scheduled maintenance is a monetary penalty. In other leases the penalty for failing to perform the scheduled maintenance could be the lease is terminated and the car must be returned.

In the event that the lease is terminated your deposit will also often be forfeited and worst of all you are left without a car since the dealer will take the car back when terminating the lease.

9. Early Termination Fees

Another major reason not to lease a car is that the lease often charges early termination fees.

When you enter into a lease agreement, you agree to pay a certain amount of money over a predetermined period of time. If you attempt to end the lease prior to this predetermined period of time you may face a host of financial penalties depending on the terms of your lease.

In some instances, you will be responsible for paying the amount due for all of the remaining periods of your lease term even though you are returning the vehicle.

If this occurs, you are essentially paying for the full term of the lease even though you are only getting the use of the car for a fraction of the term. In other instances, you may be charged a flat termination fee.

10. Lack of Peace of Mind

One of the main reasons not to lease a car is the lack of peace of mind that can be associated with car leasing.

When you lease a car, you have the potential to face a seemingly never-ending list of penalties for excessive mileage, damage, early termination, lack of maintenance, and many others.

For some of us attempting to avoid the imposition of these penalties will lead us to stash our cars in parking spots in remote sections of parking lots to avoid door dings and scratches that will invoke the damage penalty.

For others, we will end up watching the odometers with every trip or walking places to make sure that we do not exceed the mileage limit to avoid the mileage penalty.

For many of us driving our car is a way for us to unplug from the stresses of the world and have a carefree moment. That carefree moment for many of us would be eroded with constantly having to monitor each and every movement of the car.

We would end up paying tens of thousands of dollars for a car that we cannot fully enjoy given the many potential penalties that loom over our heads every time we drive it.


While there are some who may benefit from leasing a car, many people will find that it is more beneficial to purchase their vehicle. When you lease a car, you face the very real probability that upon the expiration of the lease you will have excessive penalties for mileage overages, damage, or missed maintenance.

In most cases, while leases seem to be appealing given their often lower monthly payments, it is often a better decision to just purchase the car instead of leasing it.

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