Disadvantages of Leasing

D

Leasing and owning both have advantages and disadvantages. The advantages of leasing are low down payments, lower monthly payments, and the ability to drive a new car every few years. However, there are also disadvantages to leasing.

Option A states that owning makes more financial sense than leasing when interest rates are low. This is a disadvantage of leasing because when interest rates are low, financing a car purchase can be more affordable than leasing. This option is a valid disadvantage of leasing.

Option B, no mileage penalty, is not a disadvantage of leasing. Most lease agreements have a limit on the number of miles that can be driven without incurring an additional fee. If the mileage limit is exceeded, the lessee must pay an additional charge for each mile over the limit. Therefore, option B is incorrect.

Option C, increased flexibility, can be both an advantage and disadvantage of leasing. Leasing provides more flexibility because lessees can upgrade to a new car every few years without the hassle of selling the old car. However, it also limits flexibility because there are typically restrictions on customizing or modifying the vehicle, and early termination of the lease can result in significant fees. Therefore, option C is a valid disadvantage of leasing.

Option D, no trade, is not a disadvantage of leasing. In fact, trading in a leased car is a common option when the lease term is up. The lessee can return the car to the dealership and choose to lease or purchase a new car. Therefore, option D is incorrect.

In summary, options A and C are valid disadvantages of leasing, while options B and D are incorrect.