Contrary to what many people believe, a car lease is not a very good investment. When looking at the bare facts, a lease can actually cost the owner more than he realizes; the vehicle can lose as much as 20 percent of its market value during its lease life. In addition, the usual maintenance costs can reach several hundred dollars even for brand- new cars.
When someone leases a car, he basically purchases the right to drive that car for a finite period. Most leases are around three years, with some lasting as long as five years. At the end of the lease term, the driver has the option of purchasing the vehicle. Most people however don’t go with this option and instead trade in their old leased vehicle for a new one.
While this might seem more practical in the short run, in the long run it basically means that the driver is paying for his car for the rest of his life. It becomes a perpetual rental with no benefits of true ownership.
Of course, there are some advantages to leasing such as having a new vehicle every few years, but in terms of costs, this advantage can get old really fast. For those who are more concerned with expenses rather than appearances, an automobile lease might not be the best choice as a long- term solution.