The Right Car-Lease Terms
I’ve done 2-year car leases, 4-year car leases and 5-year car leases. Oddly, I never have tried a 3-year car lease, which is probably the most popular and practical car lease today. Nearly all dealers, sales people and financial advisers will recommend a lease that is shorter than 4 years. There are some good reasons for this, which I will get into below, but there are also some drawbacks and disadvantages of short-term leasing that is often not mentioned or considered. Having had the experience of leasing so many different cars, I thought I would share my thoughts on the disadvantages and advantages of each of the different lease terms.
5-Year Car Leases (60-Month Lease)
5-Year car leases are not very common anymore. In the late 80’s and early 90’s, the five-year lease was a good option for me. I had my eye on a Toyota 4x4 Pickup and a Honda Accord LX, but I wanted to keep my payments around $250 or less. In 1987, I leased a brand-new Toyota 4x4, V-6 Pickup for only $237 a month and no money down. Then, in 1990 I leased a 1990 Honda Accord LX for $235 a month and nothing down. These turned out to be great cars and I never regretted making the monthly payments. In fact, I was able to trade the truck in after 3.5 years into the lease, and leased a Honda Civic in it's place for just $205.00. I needed more seats and the Honda Civic was more practical for hauling kids and saving gas money. Because these were popular cars with extremely high residual values, I was able to significantly reduce my payments by getting into a longer term lease. Read the rest of this entry »
