Atlantic Blog

Are you thinking about leasing a car?  Do you think a lease is easier and more convenient than buying a car?  Are you intrigued by those low, “I can’t believe what I’m seeing” monthly lease payments?  What is the attraction of a lease?  If it is about the money, then you can absolutely do better than a lease.

Full disclosure. Yes, Atlantic is a credit union.  Yes, we would rather you finance your car with us (and our low, low auto loan rates), rather than get a short term lease with a car dealer.  But, we also really believe that it makes more financial sense to buy a car.

The top line, advertised, low monthly payments for a lease can be seducing.  There is a reason that someone coined the phrase, “If it is too good to be true, then it is.”

What else is involved with a lease beyond the monthly payment?  Well there is the down payment that is required.  Usually in the $2,000 range or more.  Many leases have a strict mileage limit.  Sure you can drive “your” car more than the agreed upon mileage, but you will have to pay for it.  Costs may range from five to twenty cents per mile.  If you were over the mileage limit, it would almost be like paying for a taxi when driving “your” car.

And then there is the danger of an accident.  Unfortunately, accidents do happen.  You will have insurance on the new lease, but if “your” car is deemed to be totaled then the insurance will pay for the “value”, which has depreciated the moment you drove off the car lot.  You will then need a new car and your deposit on the lease is gone.  That is expensive.

What if there isn’t an accident, just some of the normal wear and tear of driving around.  With a lease, your definition of normal wear and tear and the dealer’s definition of normal wear and tear could be quite different.

Oh how the back end fees can add up when you return the lease.  Back end fees are usually in the fine print.  You have to read the fine print.

When  you add in the upfront fees and the back end fees with the monthly lease fee, then you start to get a view of the real cost.  And when the lease is up at the end of three years, you give back “your” car.  If you buy a car, then you still have your car, at the end of three years, and you still have the asset value.

If it is about the money, then buying a car, pre-owned, is the best way to avoid paying a lot of interest and big time depreciation when you drive it off the lot.

And yes, we would love to help you buy a car.  The Atlantic Blank Check Approval auto loan program allows you to walk into a dealer, with the power of money in your pocket, and make the best deal.

Is there ever a right time for a lease?  If money is no object and you like driving a new car every three years, then maybe a lease is right for you.

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