For many people, leasing a car is an ideal situation; leases are less expensive than purchasing a car, so you can usually secure a nicer vehicle for less money. If you want to drive a new car without the heavy initial expense, then leasing might be right for you. Car prices continue to rise, so in some cases, the only way to get the car of your dreams is to lease.
Leasing is easy on your repair budget, too. Since you are leasing a new vehicle it will not likely need much repair work while you have it. Leased vehicles are also covered under a warranty, so you can eliminate repair costs from your budget, too.
What Does Leasing a Car in Involve?
Before you lease a vehicle, you should be aware of how leasing works and what to expect from the process. Learning more about leasing can help you make an informed decision. Consider the following details before you sign a lease:
Your Payments Reflect the Car’s Value.
The more expensive the car, the higher your payments will be; if you are worried about the cost, choose a less expensive model or one with fewer options to save.
Higher Residual Percent Saves You Money.
All cars depreciate over time, even leased ones. A lease includes a residual value percentage fee that helps cover the cost of depreciation; the higher the residual percentage is the lower your payments will be.
Understand Your Set Miles.
Your lease includes a pre-determined number of miles that you can drive each month and year. If you go over, you’ll have to pay some additional fees. These fees can vary, so before you lease, make sure you understand the set miles and any fee for going over.
Expect a Disposition Fee.
When you are ready to return your leased vehicle, you’ll be charged a disposition fee; this fee ranges from $300 to $500 and is usually due when you return your car.
Understand What Money Factor Means.
“Money Factor” is another term for ARP; negotiate to get the lowest possible money factor and you’ll save money over the life of your lease.
Is it Better to Lease or Buy a Car?
For most individuals and families, a lease allows you to drive a better-quality car for a lower price; you should still check out all your options before you decide on a specific deal, though.
You Won’t Own the Car
When you purchase a car outright, it is yours, even if you have to make payments to buy it. When you lease, you’re paying for using a vehicle that the lender owns, similar to renting a car from an agency. Using Memphis car leases means you get lower payments and few repair concerns, but you can’t resell the vehicle or give it away.
Leasing Cuts Down Up-Front Costs
Saving the down payment required to purchase a car is tough; Memphis car leases allow you to drive away without making a down payment at all. You’ll simply pay a security deposit, the first month’s payment and a few minor fees. If you do have money to put down, you can lower your monthly expenses, but that is not a requirement.
No Need to Worry About Selling Car Leases
Whether your family outgrows your car or you’re simply ready for something new, it can take a while to sell your vehicle, particularly if it is older or in poor condition. When you lease, you don’t have to worry about reselling the car before you get a new one; you’ll simply return your old car and select a brand new one to lease.
When you purchase a car with a loan and make payments, you’ll own the car at the end of the pay period; when you make the last payment, the title is sent to you and the car is yours. With a lease, you are not obligated to or tied to the specific car you’ve been driving. You can return it at the end of the term and choose a new one to lease next. If you love the car you’re leasing and don’t want to give it up, you can purchase the car at the end of your leasing term.