3 Reasons to Rethink Leasing a Car for Personal Use in 2023
Leasing a car has long been a popular option for individuals seeking to drive the latest vehicles avoiding the hassle of extensive maintenance and ownership commitment. As the automotive industry has changed so has the vehicle leasing options available to the general public. In 2022 and 2023 several factors have developed making decision to lease a vehicle for personal use not as appealing as it once was.
Let's delve into the top three compelling reasons that shed light on why leasing might not be as appealing to regular people as it once was.
**1. Evolving Market Dynamics and Supply Chain Challenges
The automotive industry has experienced unprecedented shifts over the past couple of years with supply chain disruptions and chip shortages impacting manufacturing capabilities. This has resulted in reduced availability of certain models and variations leading to increased demand for the vehicles that are accessible. When leasing a car, you may find yourself facing limited choices due to the constrained supply. In such a scenario, settling for a vehicle that doesn't truly align with your preferences could prove to be a compromise that doesn't match your initial leasing expectations.
**2. Potentially Higher Monthly Payments
Historically leasing was attractive due to its lower monthly payments compared to traditional car loans. However, this landscape is changing and in 2023, leasing may not always guarantee lower costs. In fact, often times leasing a vehicle is the pricier option. The main contributing factors to these rapid changes are inflation, supply chain disruptions and increasing fluctuating interest rates. Also, it is important to take under account that as the overall cost of vehicles increases lease payments will follow suit, diminishing the perceived financial advantage to regular individuals not intending to use the leased vehicle for commercial/business purposes. As there are no financial incentives such as tax deductions for non-business/private individuals when leasing a vehicle.
**3. Escalating rigidity in mileage and use restrictions
Traditionally leasing agreements come with strict mileage limits, typically ranging from 10,000 to 15,000 miles per year. However, in the recent years we have seen a shift in mileage restrictions. Greater fees for miles traveled outside the allowable yearly maximum are being imposed more frequently. These increasing use related costs can be very limiting for those who frequently travel or have erratic usage needs. In a year marked by changing work dynamics and a resurgence of travel, the mileage restrictions of leasing could lead to overage charges or the need to adjust your plans to accommodate the terms of the lease.
While leasing a car for personal use has been a popular choice in the past, the changing dynamics of the automotive industry, potential for increased monthly payments, and restrictions on mileage are compelling reasons to consider other options in 2023. As consumer preferences shift and the automotive landscape continues to change, individuals are urged to carefully evaluate their needs and explore a range of possibilities, from purchasing a new car to considering pre-owned vehicles. Ultimately, the decision should align with your lifestyle, preferences and financial goals.
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