Car Leases Are a Horrible Idea

Assalamu Alaikum girlie! 🌸

First, thanks to everyone who joined the workshop on Saturday! We’re transforming our relationship with money this year.🤩 See you in November Inshaa Allah!

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On to today’s topic - let’s talk about a scam in a suit.

Car leases. 

Sounds sleek, right? New car every 2–3 years. Lower monthly payment. No big commitment. Live your best life.
But underneath the shiny marketing?

🚨 You’re paying hundreds to rent a car long-term - with no ownership, no equity, and plenty of strings attached.

Let’s break it down.

What’s a Car Lease, Really?

It’s not buying.
It’s not renting short-term.
It’s a basically glorified long-term rental.

At the end of the lease, the dealership gets the car back, and you walk away with nothing.
Except maybe a bill for “excess wear and tear,” mileage overage, or a “disposition fee” (yes, that’s a real thing).

The Ugly Truth Behind the Aesthetic:

❌ You Build Zero Equity

Every month you’re making payments on something you will never own.
It’s not an asset. It’s not an investment. It’s basically the car version of tossing rent money at a luxury apartment and calling it “adulting.”

Except it depreciates even faster.

📉 Cars Lose Value FAST

The average new car loses ~20% of its value in year one, and up to 60% by year five (Ramsey Solutions).
Leasing means you’re paying a premium to borrow a car during its worst value-drop phase.

Aka: You’re overpaying to lose money.

💸 Hidden Fees Are Everywhere

Need to drive more than the set miles per year? There’s a fee for that.
Car got a ding on the door? Fee.
Returning it early? Huge fee.
Oh, you thought you were saving? Cute.

Dealerships bank on you not reading the fine print and most of us don’t. It’s a trap.

🚫 Interest is Usually Baked In

Even if it’s not called “interest,” many lease contracts have something called a “money factor” which is just interest in disguise.
And remember, ribaa is prohibited in Islam and should be avoided at all costs.

⛓️ Lock-in Contracts

Life changes. Jobs shift, cities change, families grow.
Leases? Not so flexible. Ending early means paying out the rest, or a massive early termination fee. Neither are cute.

But Isn’t It Cheaper Than Buying?

That’s the myth.
And car dealerships love that you believe it.

Sure, your monthly payment might be lower than financing a purchase. But…

• You’ll have to make a down payment anyway

• You’ll still pay for insurance, maintenance, and fees

• You’ll walk away with $0 in equity

• And you’ll have to repeat the whole cycle again in 2–3 years

It’s financial hamster wheel energy. Just spinning.

Here’s the Better Path:

If your goal is peace of mind and long-term financial stability, skip the lease and consider this instead:

1. Buy Used, In Cash (or Save Until You Can)
   A solid, well-maintained car > a shiny trap with debt attached.
   Reliability wins every time.

2. Keep Your Car For As Long As It Serves You
   You don’t need to “upgrade” every 3 years. That’s not a flex.
   A 2010 Honda with no payments >>> a leased 2025 Range Rover with a $700/month bill.

3. Build a Dedicated Car Fund
   Set aside money monthly in a separate, interest-free savings account. Label it “Future Car 🚗” to stay motivated.

4. And If You Must Finance…
   Tune in next week. We’re unpacking car loans and why they’re still not great but a lesser evil than leasing.

Want to take control of your money?

Book a consultation, let’s create a strategy so you can finally reach your financial goals.

Your #1 fan,

Fatimah