There are several disadvantages to choosing car leasing for new graduates in the U.S. If the terms of the lease agreement and long-term financial planning are not adequately considered, it can lead to unnecessary financial burdens. Here are some disadvantages that new graduates should consider when choosing car leasing:

1. It can be expensive in the long run

Leasing generally has lower monthly payments initially, but in the long term, continuously leasing a vehicle can be more expensive. If you want to keep renewing the lease to use the latest models, your total spending may exceed that of owning a vehicle. Especially, if you want to buy the vehicle after the lease ends, additional costs will arise separate from the lease payments already made.

2. No ownership means no asset accumulation

At the end of the lease, you must return the vehicle, so you do not 'own' the vehicle during the lease period. Therefore, the money paid through leasing does not accumulate as an asset. In contrast, purchasing a vehicle means it remains as an owned asset over time, allowing you to recover some costs when selling or trading it in.

3. Mileage limits

Most lease agreements have annual mileage limits. For example, if there is a limit of 12,000 miles (about 19,000 kilometers) per year, exceeding this limit incurs additional fees. For new graduates, especially if commuting frequently or planning trips, mileage limits can be burdensome.

4. Costs due to vehicle damage

Leased vehicles may incur additional costs based on their condition at the end of the contract. For instance, if there are scratches or damage to the vehicle, repair costs may be charged, or if there is excessive wear, you may have to pay fees. These costs can create unexpected burdens.

5. Initial cost burden

Leasing may have lower initial costs than owning a vehicle, but there can still be a down payment or initial costs. For new graduates, this initial cost can be a larger burden than expected, and they may struggle to cover it.

6. High prices when considering vehicle purchase after contract ends

To purchase the vehicle at the end of the lease, you typically pay based on the vehicle's residual value at the end of the lease term. However, after leasing a vehicle, you may pay a higher price than the used car market to buy it. This additional cost can be a burden for new graduates.

7. Difficulty in canceling or changing the contract

Lease agreements are generally long-term contracts, making it difficult to cancel or change them mid-term, which can incur penalties or additional costs. If you no longer need to lease the car due to job changes or financial changes, it can be costly to terminate the lease agreement.

8. Impact on credit score

To enter into a lease agreement, a certain level of credit score is required. New graduates may have lower credit scores, making it difficult to lease or requiring them to enter into contracts at higher interest rates. Higher interest rates can make monthly lease payments more expensive than expected.

Choosing car leasing as a new graduate can reduce initial cost burdens and allow access to the latest models, but in the long run, there are disadvantages such as high total costs, mileage limits, and additional costs for vehicle damage. For those who want to keep a car for a long time or accumulate assets, purchasing may be a better option. It is important to carefully consider your financial situation, driving habits, and mileage before choosing leasing and to thoroughly check the terms of the lease agreement.