Leasing a vehicle is an attractive proposition for potential car buyers. Arguably, car leases present buyers with a cheaper option compared to an actual purchase. Thus, it’s possible to use a brand new car at a reduced price. Nowadays, the cost of owning a new vehicle keeps rising, and leasing seems to be the ideal option for you to secure your dream vehicle without burning a hole in your wallet.
Ideally, car leases expire before the vehicle breaks down or requires a trip to the auto repair shop. As such, it can save you lots of time and money that would have been used to pay the mechanic. Additionally, leased cars are usually covered by the manufacturer’s warranty, and you don’t have to fret about costs in case there are repairs to be done.
What Does the Car Lease Deal Entail?
Numerous procedures make up the process of leasing a vehicle. If you are looking to sign a car lease, you need to understand some of the essential steps outlined below:
Your Installments Are Determined By The Car’s Value
The money you will have to pay each month is calculated against the overall price of the car. If you wish to save, always choose a vehicle that comes with a lower price tag.
Cut Costs With Higher Residual Percent
Every car obtained through a lease carries a residual value percent that reflects on your monthly installments. This money covers the cost of depreciation over time. It’s advisable that you choose a high residual percentage since it helps lower your monthly payments.
Understand The Set Mile Threshold
Car leases have a clause that dictates the number of miles you should drive every month. If you exceed the agreed mileage threshold, you will incur additional fees calculated for every mile you have pushed past the agreed limit. Before you sign a car lease, know the number of miles you are permitted, and the amount you will pay in case you drive beyond the limit.
Expect A Disposition Fee
Car leases operate more like rental properties. There’s a disposition fee to pay upon the expiry of the lease. Usually, you can expect to pay between $300 and $500 at the end of the lease duration without fail.
Familiarize Yourself With Money Factor
If you have no idea about the money factor, it works the same way like your ARP. It’s advisable to go after the lowest money factor to save a lot more.
To Lease Or To Buy?
It’s obvious that if you are browsing through, you are looking for your dream car. Before you proceed, take the time and acquaint yourself with the pros and cons of buying and those of leasing. This will help you to make a smart decision.
It’s true that car lease deals have immense benefits, but you need to know what you are signing up for according to Zooomr.
You Won’t Own The Car
Buying a car means you will own it even though you may have to pay installments over a period. If you lease, it’s a pay per use arrangement, and the lender retains ownership. If you have signed a car lease deal, you have the benefit of using the car, but you don’t own it or have the right to sell or loan it out.
Leasing Reduces Up-Front Costs
When you decide to purchase a vehicle, you are required to have the financing ready, and you need a down payment or a trade-in deal. With a car lease, you won’t be hard-pressed to pay a deposit. Rather, all you need is the initial installment, collateral, acquisition fees, and any other associated fees or taxes. If you want to enjoy smaller installments, consider paying a bigger amount upfront although it’s not obligatory.
Don’t Fret Over Car Lease Sales
Selling a vehicle isn’t an easy task. Many customers are not ready to spend much on used cars. If you want to sell it, you need to maintain the vehicle in top shape. If you choose to lease, it’s never a problem selecting a vehicle with a high resale value or marketing it since it’s not your responsibility to sell it later.
When buying a car, remitting end payments means you have full ownership. When you pay the last installment, you will get the title, and you can do with it as you wish. The scenario is different with a car lease. Even though you may opt to buy the vehicle after the lease expires, you won’t automatically own it after paying the last installment unless you resolve to proceed and purchase it.