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June 8, 2021
Leasing a vehicle can be a great option for those looking for an affordable way to drive newer cars.
However, to ensure you get the best lease deal without any unwanted surprises, you must ask the right questions before signing a lease.
Here are some of the most important questions to ask when leasing a car.
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Ask yourself how long you want to drive the same car. If you plan to change your driving habits in a few years or like having the newest technology, leasing is a good option. Also, make sure your lease term length fits your new car preferences.
Leasing a car comes with many benefits, including:
Ask yourself if leasing a car is a good idea based on the pros and cons it offers and your unique needs. Those who like to get new vehicles every couple of years may benefit from leasing a car. However, leases have mileage caps and can be pricier than buying a car you will keep for many years.
While you may not be immediately declined for a lease with a credit score under 619, there’s a good chance you’ll have to pay more interest or put down a larger down payment. Oftentimes, zero-down leases do require a good credit score. Learn more about what it means to be a well-qualified buyer.
Most leases are for new cars, but used car leases do exist. Used car leases are for Certified Pre-Owned vehicles under 4 years old and have less than 48,000 miles. If you are interested in leasing a used car for lower monthly payments, ask to see if any used car leases are available.
You want to know how much the car will be worth at the end of the lease, which is the residual value. The residual value directly relates to the price of your monthly payments. During the lease, you pay for the difference between the starting value and the residual value. Therefore, a higher residual value results in lower monthly payments.
Lease terms may vary, but a lease typically lasts between 2 and 5 years. Learn more about short-term leases here.
Most of the time, leases advertised with low monthly payments include an upfront cost. Ask about what money is due upfront because paying more upfront may not save you on the lifetime cost of the lease. If something happened to the vehicle, you could not usually get that money back.
Leases require a deposit that you can only get back at the end of the lease. Inquire about what requirements must be met to get the deposit back. Keep in mind that the deposit is different than the down payment and that you cannot get the down payment back. Some leases do require a non-refundable deposit, so be sure to ask.
Make sure the lease you’re considering includes enough miles for your driving needs. Most often, leases include around 12,000 miles per year, but some may be more or less. You may also be able to negotiate a high mileage lease if you are certain you need more.
Going over the mileage on a lease may not seem like a big deal, but it can cost you quite a bit. Find out what the excess mileage charges are. It will also help you determine if it’s worth trying to negotiate a high-mileage lease.
The “money factor” refers to the interest rate of the lease. However, the money factor is not written as a decimal and must be multiplied by 2,400 to find the percentage. Ask the dealer for the money factor and convert it to a percentage to determine what interest rate you are being offered. Use our calculator to convert the money factor to APR.
Leases often include several fees. Negotiating these fees can help you lower your lease amount, so be sure to find out what fees are being charged.
Car lease specials can offer significant savings. Check with the dealer to find out if they have any deals that could help you save. Always read the fine print to ensure you know the qualifications.
Yes, some manufacturers will offer lease deals that advertise zero-down or zero due at signing. If you have great credit, it's also possible to negotiate a higher monthly payment with no down payment or due at signing.
Those who lease the vehicle typically must maintain it as if they own it. Most often, you’ll need to pay for regular upkeep like oil changes and more.
Find out if the manufacturer’s warranty covers the full lease term and what exactly is covered in it. Most often, when you sign a lease that is covered by the warranty, you will not have to pay for repairs.
Most leases include charges for excessive wear and tear. What you may define as wear and tear can vary from the dealer, so make sure you know what they consider wear and tear.
The end-of-lease purchase price may be up to a few thousand more dollars than the actual market value. Make sure to compare the buyout price to the market value while also checking if there is a “purchase option fee” that could add even more if you buy the car after the lease.
Most lease contracts offer a few options. While most people will return the car and begin a new lease, you should also make sure your contract includes the ability to extend the lease and buy the car at the end of the lease.
Some people who lease a car through a business may need GAP insurance. The GAP insurance covers additional costs that a typical insurance plan won’t, and it can be a good idea to purchase if you write off your lease payments.
You should be able to turn in your leased vehicle to a different dealership as long as it is authorized by the vehicle manufacturer. For example, if you lease a Lexus, you can turn it into a different Lexus dealership than where you got it. Ask about the process of doing so to make sure that the return will go smoothly.
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Posted in Car Buying Tips |