Are you currently leasing a vehicle, or are thinking about leasing one? If so, please think through the option thoroughly before committing to it. Generally speaking, leasing a vehicle is a terrible financial decision, with the main exception being that the lease serves as a tax write off for your business. Otherwise, why saddle yourself with a car note, only to be forced to return the car at the end of the lease term? Chances are that you will need to lease another vehicle to replace the previous one, which means you will be locked into another loan, for yet another set of wheels you never build equity on and will never own (not unless you purchase that car at lease end, which I ended up doing in 2017…more on this later).

I fully realize that there are some tempting aspects of car leasing, the first of which is the fact that you get to drive a new car every 2 or 3 years once the current vehicle lease comes to an end. The down payment and monthly payments are also lower than if you were to purchase the vehicle. However, there are numerous other negative aspects of leasing, one of which is the fact that you will be limited to a certain number of driven miles during the lease term. You also cannot make modifications to a leased set of wheels that are permanent, since you are borrowing the car.

I don’t plan on ever renting a car again, because then I’d be paying for the first portion of the vehicle’s depreciation, which is not a sound financial decision. The first mistake I made was when I was lured into a 2- year prepaid lease back in 2009. I had actually allowed a car salesman convince me that keeping the brand-new wheels I had bought outright in 2007 was not the best idea, and that I could easily roll into a prepaid lease. By lease end in 2011, I didn’t have enough saved up to purchase a car, so I rolled into not one, but two consecutive, 2-year leases.

When I realized how much I had been fleeced by the first 3 car leases, (a term which Dave Ramsey loves to use when referring to car leases), I made a promise to myself to save up enough money to purchase the 2015 new leased vehicle outright, and I kept that promise. Once that was accomplished, I set out to save up enough money to eventually purchase my next vehicle without taking out a car loan. I now have a chunk of change set aside (over $50K) for my next vehicle, and I have the peace of mind of knowing that I won’t be kept on the financial hook ever again for a car.