Review of Problems with Car Leasing Companies

 “Leasing a car can be a tricky thing if the consumer is unaware of the hidden pitfalls”, stated Merve Haddad in an industry trade magazine. And it is true. Take Audi car leasing, for example, if an individual wants to lease an Audi he will set up a contract with the dealership and make monthly payments. Unfortunately, unless he opts to make a balloon payment at the end of the lease term he will not have anything to show for his payments.

Excess mileage charges are one of the many hidden dangers in leasing a car. Using the Audi car leasing example, consider the following situation:
You love your Audi and it is your only car. You drive it everywhere. You have to drive over 50kms to work each way every day. You also plan to drive your car across country on 2 separate occasions this year and

 2 occasions next year. And this does not include any other trips you might make.
At the end of the lease period you will find excess mileage charges are owed. Excess charges can really add up and in the end you will end up spending much more than you originally planned on. This hidden factor of leasing cars is noted in the financing paperwork but is breezed over by car salesmen when they are trying to convince you to buy a vehicle.

Bad credit car finance is one of the main reasons more and more consumers are leasing cars, especially the ones with bad credit history when in default. But are they helping or hurting themselves? You can look at this from 2 different standpoints.

The first way of looking at auto lease deals for persons with a bad credit history involves building good credit. Leasing a vehicle usually does not require a large down payment and has smaller monthly payments. This makes it attractive for persons with a bad credit history because they most likely do not have a lot of money on hand.

 
Unfortunately, bad credit car finance leaves the person without any assets to show for the money he spent. At the end of the lease term you can both turn the vehicle in, (and most likely pay excess mileage charges or excessive charges for minor damages to a car), or make a large balloon payment and buy the vehicle outright. Persons with a bad credit history will most likely have to turn the vehicle in because they cannot afford the balloon payment.
Another detracting factor to a cheap car lease is that without a car you will not have the assets necessary to raise capital with logbook loans. Consumers with bad credit history are the main customers for logbook loan companies. A logbook loan company does not do a credit check and only ask that you have a job and a car. You will put the car up as collateral for the loan. If you have leased a vehicle you will not have a vehicle at the end of the lease period. If you do need to raise capital through logbook loans you will not be able to do so.