Are you thinking about leasing a car? Instead of purchasing a new or used vehicle, many people save money by leasing a car. Since car leases are significantly less than the retail prices, leasing provides an affordable way for you to get the car you want at a price you can afford. By paying a monthly lease instead of a loan or large retail price, you can drive the car you want at a fraction of the price.
Since a vehicle’s lease typically ends before the vehicle incurs damages or requires repair services, leasing a new vehicle means that you will be spending less time at the mechanic shop. Moreover, even if you experience a problem with your leased vehicle, all leased vehicles remain under their manufacturer warranty, meaning that in the unlikely event of a mechanical failure, you won’t need to cover the cost.
What Does Leasing a Car in Involve?
Before leasing a car, you will need to understand a number of important things about how leasing works.
Your Payments Reflect the Car’s Value.
When paying your lease, your payments are in proportion to the retail price of the vehicle. This means that if you are looking to save money, you should probably avoid leasing an expensive vehicle.
Higher Residual Percent Saves You Money.
Of course, the car depreciates in value while you are paying it off, and the leasing company takes this into account, factoring this residual value into your monthly bill. If you want to lower your monthly payments, raise your residual percentage accordingly.
Understand Your Set Miles.
Leases give you a limit of a certain amount of miles you are allowed to drive each month. If you exceed this limit, the leasing company will charge you a fee for each mile exceeding your agreed upon limit. Make sure you calculate your driving needs and understand the costs of going over limit before signing your leasing agreement.
Expect a Disposition Fee.
Leasing a car isn’t very much more expensive than paying for a monthly rental. However, be aware that you will be charged a disposition fee when the vehicle is returned, a fee that typically totals somewhere between $300 and $500.
These fees are typically mandatory.
Understand What Money Factor Means.
You should make sure that you get the lowest money factor possible. Your money factor is the same thing as your ARP, and is necessary for ensuring that you save the most money.
Is it Better to Lease or Buy a Car?
Since you are visiting this page, one can safety assume that you are in the market for a new vehicle. Before you take any steps, Zoomr firmly believes that you need to make an informed decision before signing any papers. Make sure you know the difference between buying and leasing, letting you choose the best option for you. Memphis car leases give you great options, but make sure the choice is right for your particular situation.
You Won’t Own the Car
Remember that, if you are leasing a vehicle, you don’t legal own the car. This means that you cannot make choice about what to do with your vehicle. When leasing a car, you are renting the use of the vehicle, an automobile that remains the property of the lender. A Memphis car lease gives you lower payments, but you trade away your ability to mortgage or sell the vehicle, were you to run into financial need.
Leasing Cuts Down Up-Front Costs
When you need to finance a new automobile purchase, the dealer will require a down payment or trade-in to guarantee the transaction. At Memphis car leases, by contrast, you won’t need to offer a down payment. On the contrary, you will only be required to pay the first month’s bill, as well as a security deposit, acquisition fees, and other various charges, taxes, and bills. On the other hand, if you would like to lower your monthly payments, you can invest a larger amount of down payment initially, thus lightening your financial burden in the future. Such an up-front amount, however, is neither necessary nor required.
No Need to Worry About Selling Car Leases
Remember that if you purchase a vehicle, you will eventually have to sell it later – often a rather daunting task. Typically, your customers won’t give you a high price for your used vehicles, not to mention that you will be paying the cost of maintenance throughout. When leasing a car, resale value no longer becomes a matter of concern, as the leasing company retains ownership of the vehicle, relinquishing you of the responsibility to resell it.
Even if you buy a car, you still lack complete ownership until the final installment. The title of the car remains in the hands of the bank or loan company, preventing you from doing what you wish with your vehicle. Unlike buying a vehicle, when the lease expires, although you often have the option to purchase the vehicle at that point, you will not be obliged to do so and will in fact be required to return it to the leasing company.