Auto leasing has its pros and cons. But it’s a far less expensive option than financing. If you’re looking to drive a new car without breaking the bank, leasing may be your best option. With a leased car, you don’t have to worry about repairs or other mechanical emergencies, because everything is covered under a manufacturer’s warranty. But since you’re leasing a brand new vehicle, the contract will likely be up long before you need the warranty.
What Does Leasing A Car Involve?
There are several steps to leasing a car. If you’re really interested in leasing, it’s best to do some research on how leasing works. There are pros and cons to both leasing and financing. It’s imperative to read over the contract with a fine-toothed comb before you sign. Some of the most important information you will need is listed below.
Your Payments Reflect The Car’s Value.
Your monthly payment is contingent upon how much the car is worth. Choosing a car with a lower value means a lower monthly payment for you.
Higher Residual Percentage Saves You Money.
The monthly payment on a leased vehicle is based on the residual value percent. Cars depreciate, so this factor is taken into account when determining the value of the car. So if you’re looking to save the most money, it’s wise to lease a vehicle with the highest residual percentage.
Understand Your Set Miles.
Your leased vehicle will have a set number of miles that it can be driven each month. If you go over the allotment limit, you will be charged a fee per mile. Make sure to read the fine print regarding overages, so you will have a clear understanding of how allotted miles work.
Expect A Disposition Fee.
There are a number of fees attached to a leasing agreement. One of the most common is a “disposition fee.” This fee is charged at the time the lease agreement ends. The disposition fee can range anywhere from $300 to $500, and it is charged if the customer opts not to purchase the vehicle.
Understand What Money Factor Means.
The money factor with a lease is the same as the APR when you finance a vehicle. Always aim for the lowest money factor to save on your monthly payments.
Is It Better To Lease Or Buy A Car?
Whether you lease or finance, there are advantages and disadvantages. If you’re in the market for a new car, it’s best to thoroughly research both options to find what best fits your lifestyle. If you have certain priorities, it shouldn’t take rocket science to determine which options is best. If it’s a question of finances, leasing is likely the best option.
Although Memphis car leasing provides great perks, it’s advisable to understand exactly what you’re getting into before signing on the dotted line.
You Won’t Own The Car.
The big difference between financing and leasing is with financing, the car is yours to do as you like while you’re making payments. When leasing a vehicle, you are simply paying for the privilege of using a dealership’s vehicle. Although leasing comes with strict guidelines, the upside is you’re paying less money.
Leasing Cuts Down Upfront Costs.
With new car financing, a down payment or trade-in is almost always required. This is not necessary with Memphis car leases. You will need the first month’s payment, a refundable security deposit, fees and taxes. Although it is optional, you may put up additional funds if you want a lower monthly payment.
No Need To Worry About Selling Car Leases.
Selling vehicles can be a major headache. Leasing definitely takes the sting out, because the requirements are far less. Most customers are looking for the best deal they can get, which means a new car with few maintenance worries. With leasing, the process is pretty cut and dry, which eliminates the need for seeking out customers or high-pressure selling.
When financing a vehicle, the end payment is the last requirement to make the car yours free and clear. Once the last payment is received, you will receive the title. With leasing, the last payment on the contract does not mean the vehicle is yours. You are required to turn the vehicle in. However, if you want to purchase the vehicle, you can move forward.