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The Consumer Law Group, P.C.

Leased Cars Instead of Clunkers are Popular for High Schoolers

Posted on Sep 27, 2011
Should you lease a car for your high schooler instead of buying a clunker?  More parents are doing just that according to a nationwide leasing business.  The number of one-year leases for high school seniors is up 17% from a year ago, says LeaseTrader.com, a short term leasing marketplace.  The reason:  demand for leased cars shot up this year after Japan's earthquake and tsunami shrank the number of new cars available, making used cars pricier and harder to find. 

Rather that enter a new full-term lease, parents typically take over the remaining 12 to 14 months of an existing lease. 

Pros:

* No long-term commitment on car payments.
* Most vehicles are only 1 to 2 years old, with excellent saftey records.
* No down payment.
* Lease contract expires around the same time son or daughter heads off to college.

Cons:
* No car after a year.
*Insurance costs are higher for newer cars.  And leasing companies often require additional insurance to cover their losses if the car is damaged.
* Mileage limit restrictions result in extra charges if you exceed the remaining allotted miles outlined in the lease terms, which typically run from 8,000 to 14,000 miles.
*Upkeep costs could be higher than on a car you own, because this is the bank's vehicle and you will be held to certain standards fro regular maintenance.