What Is A Car Lease & What Do You Need To Know?
What is a car lease?
It’s not a new thing. People have been buying cars and financing their vehicles through auto leases for a long time. But if you’ve never tried it before, it can look tough.
So how does someone lease a car and is it a good idea for you?
Leasing tends to work for car owners who enjoy having the newest gadgets and tech. People who don’t drive often, those who don’t have many payments lefts on their car or have a car to trade in.
So here is a quick list of car lease tips that’ll help you avoid mistakes and answer the question what is a car lease.
What Is A Car Lease?
Leasing helps lower the cost of the monthly payments of purchasing a car. It helps you to find out how much you spent on a car. Once you’ve figured out how much you can spend, you can begin checking out car leases that work with your budget.
New cars usually lease the most. Though used cars sometimes lease as well. What is a car lease is selling a part of the car’s value instead of the full price? Your budget may go a bit further using leasing and you might even be able to purchase a brand new car.
While you’re checking out vehicles, narrow it down to a couple options as soon as you can. If you can figure out what features matter to you and the cars that have those features, you’ll be solid once you arrive at the dealership.
While you’re looking at new vehicles, check out the fuel efficiency of each vehicle. The EPA’s ratings are updated and closer to miles per gallon in the real world. So new cars will for sure make that mileage. The less you spend on gasoline every month, the more money in your pocket.
Doing some research could also reveal some cool perks that might lower your monthly cost. Such as a warranty that goes for as long as the car lease. That’s pretty common.
A few manufacturers add in maintenance costs, such as tire rotation and oil changes for a short amount of time. Sometimes the dealer provides roadside assistance as well.
Lastly, a few advanced safety features could decrease your monthly bill. Call your insurance company ahead of time and see if systems such as emergency braking would decrease your bill.
Dealerships offer different types of car leasing options that depend on make and model. But you can find deals on any type of car, from pickup trucks to SUVs.
After you figure out your budget and what kind of lease car you want, you can check out the car lease deals in your area. A good starting point is the Best Lease Deals, a list of car lease special offers every month.
On average, Americans drive 13,000 miles a year. Most car leases allow room for 9,000-15,000 miles, with 12,000 the most common in a year. Most car owners drive more than a car lease allows.
Knowing how much a person drives is important information. Many car owners drive less than 10,000 miles a year, though there are also lots of people who drive up to 20,000 miles every year.
Knowing your needs as a drive and daily habits will help you find out how much you’ll pay when your car lease is up.
Leases will hit you hard for driving more than the car lease allows, often 20 cents per mile. If you continue driving past the limit and exceed five miles, you’ll pay an extra dollar when you return your car.
The monthly payment will probably be the most important number for you to keep track of. But once you’re talking to a salesman at a car dealership, there are other things to consider such as the purchase price.
Negotiate the purchase price right away.
Your monthly payments will be based on the total price of the car with the features you agree to. You could prepare yourself by looking over the Best Price Program before starting negotiations.
Trade-Ins and Down Payments
When purchasing a car instead of leasing one, people often get a down payment of 20 percent of the total price. This often includes the total value of the car traded in. In other words, anything that decreases the amount of money you borrow equates to the “capital cost reduction.”
Large down payments are not needed when leasing a vehicle. Some leases include zero down lease deals. Though if that’s the case the buyer’s credit rating would have to be amazing.
This doesn’t imply that trade in cars and down payments can’t apply to a lease car. Whatever decreases the amount you’re investing equals a lower payment for you.
However, if something does happen to the car, such as grand theft auto, you won’t be able to get your money back.
So getting the lowest payment possible is a good idea.
There will be more to pay for even after your down payment and/or trade. Taxes and fees apply after you lease a car. Often ads will say something along the lines of, “2,999 due upon signing.”
The dollar amount will differ depending on the dealership. But they must tell you the total amount you’re paying. Check your car lease, somewhere on the front page, there will be a list that will show you how the dealership got the price you’re paying.
That amount usually has things like title fees, registration fees, and the first payment. If you’re trading in a car or putting money down, that amount should be included on the list as well.
Hopefully, now you understand what is a car lease.
These tips should help you trade in your car or put a payment down with a good idea of how to go about it.
For information on auto leases and on a credit and how to best handle it, check out our website here.
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