Myths About Leasing - Part 4 of 5

Myth 4: Early-termination fees exact a far heavier penalty than if you change your mind when you buy a car.

It only seems that way. If you decide to bail out of a car purchase, you'll pay the piper, too. The car may be worth far less than you still owe on the loan. And because depreciation is spread evenly over the term of the lease, if you turn in the car early, you are sure to have "used up" more of the car than you've paid for, particularly if you made no down payment.

The early-termination fee is the way the dealer evens things up.

Moral: Plan to keep your car to the end of the lease. It doesn't make sense to stretch out the term to get lower payments if you're likely to break the lease early.