Leasing a car is more financially viable than purchasing a car upfront with cash or financed with payments. Car leases cost less than outright purchasing or financing a vehicle, providing the same vehicle at a percentage of the purchase price. As cars’ retail prices rise with consistency, leasing may be the only economically realizable method of securing the car you want to drive without busting your pocketbook.
An advantage of leasing cars is their lease term usually ends prior to most vehicles requiring major, time consuming, pricey repairs. Also, leased vehicles are required to have active warranties, mitigating or completely eliminating the cost of repairs.
What Does Leasing a Car Involve?
Consumers should keep in mind several important facets of leasing a vehicle, detailed below. Inform yourself and fully understand the following point if planning to lease a vehicle.
Your Payments Reflect the Car’s Value
The cost of monthly installments towards your vehicle’s lease reflect upon the purchase price of the vehicle if bought outright with cash. To save money on your leased vehicle, seek a make and model with lower value, therefore mandating lower lease installments.
Higher Residual Percent Saves You Money
Every leased vehicle’s lease installments is imputed with a residual value percent that accounts for depreciation, a term for the wear and tear on a vehicle. Many financial metrics correlate positively with price required: high interest rates equate to higher fees paid, etc. Conversely, higher residual value percentages yield lower monthly installments towards your lease. Seek out vehicles with high residual value percentages to save your hard-earned cash.
Understand Your Set Miles
Your leased car is subject to a per month mile limit to which the vehicle can be operated. Exceeding the upper mile limit will result in fees charged per mile traveled in excess. Prior to signing a lease agreement, calculate how many miles are allotted per time unit to keep your vehicle on pace with its set mile limit.
Expect a Disposition Fee
Although leasing is barely more complex than renting a house or car, in essence, don’t forget that a disposition fee is required to return leased vehicles. Disposition fees cover costs of cleaning and repairs, and ranges from $300 up to $500, depending on the value of the leased car.
Understand What Money Factor Means
Money factor is a different format for your lease agreement’s ARP, or annual percentage rate. Aim for the lowest money factor possible to prevent paying exorbitantly high interest charges.
Is it Better to Lease or Buy a Car?
Truly understanding the variances between purchasing and leasing is required to evaluate offers, lease values, and their fairness. As one who is reading a summary of vehicular leases, you must be interested in obtaining a new vehicle; it’s vitally important to understand these differences before moving on. Despite the fact many Nassau County car leases offer fair, reasonable prices and mile limits, Zooomr also believes you need to thoroughly absorb and reason through car leases prior to signing any lease agreement.
You Won’t Own the Car
Leasing a car does not mean you own a car: leases mean you have access to drive and operate a dealer’s car. As such, Nassau County car leases offer competitively priced payment installments, although leases do not mean lessees can resell, mortgage, or refinance their vehicle. Those who outright purchase or finance a vehicle can sell or modify their vehicles.
Leasing Cuts Down Up-Front Costs
All who finance a vehicle are required to offer collateral to secure their vehicle, in form of cash down payment or by trading in another vehicle of lesser value. If you decide to take out a Nassau County car lease, only a security deposit of far less value than a down payment is required, along with minor fees and taxes associated with purchase. Another advantage of leasing is that extra money can be included with the initial payment as to reduce future monthly installments required.
No Need to Worry About Selling Car Leases
Selling a used car yourself is difficult, as most customers in used vehicle markets refuse to pay high prices. Those interested in possibly reselling their vehicle one day must engage in regular maintenance to secure a high resale value. Yet another benefit of leasing a car comes in not having to worry about regular maintenance or the difficulties associated with reselling used cars.
In financing a vehicle, the final installment, or “end payment,” means the vehicle is then entirely the owner’s. Upon payment, the title is transferred. Leasing differs from financing a vehicle in that transfer of ownership is not guaranteed. Following lease term end, many dealers offer the vehicle at a discounted price to the former lessee. However, lessees are always required to bring the vehicle to the place of purchase or another agreed-upon location.