There’s a lot of bad information about car leasing that gets passed around. Don’t always take your neighbor’s or your cousin’s word for it. Get the facts from a reliable source.
Here are some common misconceptions:
- Anyone can lease a car. NO! You have to have an excellent credit score in order to qualify. In some cases, it’s more difficult to qualify for a lease than for a car loan. If your score is low, you may want to buy an inexpensive used car or wait until you can clean up your credit history.
- You can always walk away from a leased car. NO! You can only walk away if it’s a closed-ended lease. If it’s an open-ended lease, you have to buy the car. Don’t sign any paperwork without knowing which type of lease you’re getting.
- Insurance rates are the same whether you buy or lease. NO! Leasing companies usually require you to have more than the state-required minimum liability coverage, which is going to cost you more. You may also have to pay for gap insurance, which covers the difference between the actual value of the car and the balance still owed.