Can Your Lease Vehicle Have A Mileage Limit During Your Agreement?

By Brittney Mai Lott

Car or van leasing differs from buying in that the leasing is short term lasting for about two to four years while the buying is long term with a payment period of between five to six years. Leasing may be a good idea for individuals who want the convenience of having a car around but want to keep the monthly car payments low.

For individuals who love the smell of a new car and having the option to change that every couple of years, car leasing may be the perfect idea. Of course leasing a car every year may not be allowed by the dealer and in this case buying would do the trick. With leasing, the individual can kiss the car goodbye when it starts showing wear and tear but with owning the vehicle, the individual builds equity.

Leases limit the amount of miles that an individual can use and if they go past the set limit, then usually they have to pay for the extra miles by paying for a higher monthly amount. This can be a disadvantage because the individual may not be going above the miles every month resulting in unnecessary overages.

Uncle Sam may be more good for an individual that leases than one who buys. This is because deducting the depreciation and financing costs may be allowed under the leasing system. Some luxury cars are however exempt from this tax advantage.

Dealers expect to put up the vehicle for leasing or selling it after the end of the leasing period o it is important for the lessee to maintain the vehicle well and in a good condition otherwise the dealer will charge hefty fees and ruin the individual's credit if they don't pay the money. Leasing vehicles instead of buying them gives the individual zero costs in repair as the cars are usually new and they can maintain them well enough to get another lease consisting of a new car at the end of the period.

For the individuals who prefer to buy their vehicles, they have to remember to maintain it well otherwise they will be stuck with a car that has no resale value. Some parents prefer to give their children the car at the resale point and then they move on to buy a new vehicle. Studies have shown that single and independent vehicles usually choose to lease the vehicles while families wit tight knit relationships tend to buy.

A con to leasing a car is the no building of equity. Buying offers the individual a path to full ownership of the vehicle that they can look at and have a sense of accomplishment. No body knows the situation they will be faced with tomorrow so for those lessees who want out of their lease agreements can end up paying so much more in fees.

Car lease payments consists of depreciation and finance charges. The depreciation cost compensates the dealer for the vehicles value that was used by the lessee. The finance charge on the other hand is the interest that accumulated due to the time value of money. In essence, the individual pays for the cost the dealer owes the the location where they purchased the vehicle.

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