For many drivers, leasing rather than buying is a wonderful option. Since car lease payments are more affordable than the payments that go along with actually buying a car, leasing makes it possible for you to enjoy a nice, brand new car at a fraction of the price. Now that retail prices of cars are going up, leasing might just be the only way for you to drive the car that you want without spending more than you can afford.
Typically, car leases end before the car is old enough to need any major repairs. You don’t have to worry about spending tons of time and money at a mechanic’s shop, and leased vehicles are typically covered by a manufacturer’s warranty. This means that if a repair issue does pop up, you don’t have to worry about covering the cost yourself.
What Does Leasing a Car Involve?
There are a few different aspects of car leasing that you should know about if this is something that you are interested in. These are some of the important things that you are going to need to know if you’re thinking about leasing:
Your Payments Reflect the Car’s Value
The amount that you have to pay for your car lease each month is going to depend on the sale price of the car. To keep costs low, you’re going to want to choose a lower-valued car.
Higher Residual Percent Saves You Money.
A residual value percent, which is used to help cover the cost of the car’s depreciation, will be factored into your monthly lease payments. Shooting for a higher residual percentage will help you enjoy lower monthly lease payments.
Understand Your Set Miles
In your lease contract, you will be given a certain number of miles that you can drive the car each month. If you go above and beyond this mileage, you can expect to be charged a per-mile fee for each mile that you drive past the limit. It’s important to understand the mileage that you are allowed and to ask about how much you will have to pay per mile if you go over.
Expect a Disposition Fee
Even though the cost of leasing a car isn’t much more than paying for a monthly rental, you should know that you will generally be charged a disposition fee — usually between $300 and $500 — that will be due when you turn the vehicle back in.
Understand What Money Factor Means
The money factor that you are charged is the same as your ARP. Striving to get the lowest possible money factor will help you save a lot of money.
Is it Better to Lease or Buy a Car?
If you’re on this page, it’s probably because you are on the hunt for a vehicle. Before you take your next step, it’s essential to know the difference between buying and leasing. Understanding the ins and outs of each option will help you choose the option that is right for you. Memphis car leases are a good option for many drivers, but you should make sure that you completely understand exactly what you are getting yourself into before you sign the dotted line.
You Won’t Own the Car
When you buy a car, it is yours, and you can do whatever you want to with it, even though you do have to make payments for a while. With leasing, you will never own the vehicle; instead, you are paying a fee to use a vehicle that is actually owned by the lender. Memphis car leases can allow you to drive a nice car with a much lower monthly payment, but it does also mean that you do not have the option to sell or mortgage the car.
Leasing Cuts Down Up-Front Costs
If you choose to buy a car and are going to be financing your purchase, you will generally be expected to either trade in another vehicle or make a down payment. When you choose Memphis car leases instead, you do not have to make a down payment at all. Instead, you’ll just need to pay the first month’s payment, a security deposit, an acquisition fee and a few other fees and taxes. You can pay a little extra money upfront if you would prefer to lower your monthly payments, but this is not required.
No Need to Worry About Selling Car Leases
In some cases, selling a vehicle can be a challenge. Buyers don’t want to pay out a high price for a used car when they can just buy a new one instead, and you’ll have to worry about things like ensuring that you follow the maintenance schedule if you want to find someone to buy the vehicle. If you choose to lease a car instead, however, you never have to worry about finding a buyer because you won’t be the one responsible for selling it.
When you buy a car, the end payment means that you will then receive the car’s title and will own it free and clear. If you lease, you do typically have the option to buy the car after the lease term ends, but the car is not automatically yours like it is in a traditional buying scenario. This means that unless you choose to move forward and purchase it, you will be expected to return it.