Most car leases expire before the vehicle requires any major service or repair. During the contract period, the vehicle’s service needs fall within the manufacturer warranty. This then is a great opportunity for savings both in financial and time that would have otherwise been spent at the mechanic’s shop.
What Does Leasing a Car in Involve?
Car leasing encompasses various aspects you need to be aware of. Below is a detailed account of the most important considerations you should factor when planning to settle on the lease option for your next car.
Your Payments Reflect the Car’s Value
There is a direct correlation between the car’s value and the monthly lease payments you will make. Opting for a lower valued car as opposed to a higher valued vehicle, helps you make more savings on the payments to be made.
Higher Residual Percent Saves You Money
For each car on lease, the final value of the monthly payments has the residual price factored. The residual amount covers the vehicle’s loss in value owing to the effects of depreciation. If you want to make lower monthly lease payments, go for the car with a greater residual percentage.
Understand Your Set Miles
Miles covered forms part of your vehicle lease agreement terms. A specific allowable upper limit of your monthly mileage and the charge that accrues for every mile you drive beyond your limit is detailed. It is prudent that you are aware of the contractual miles allotted as well as the fee charged for any additional miles covered within the lease period.
Expect a Disposition Fee
When compared to the market rental payments, lease payments are higher but with good reason. On returning the vehicle, you will be expected to pay a disposition charge. The fee totals an amount between $300 and $500.
Understand What Money Factor Means
Your Annual Percentage Rate (APR) is the percentage charge on your loan, and it compares to your money factor in a lease agreement. For more savings, consider the lowest money factor value.
Is it better to Lease or Buy a Car?
It is important to understand the difference between purchase and leasing before settling for what works best for you. The car lease deals offered by Memphis are good. However, we at Zooomr believe in understanding the nature of the lease agreements before appending your signature on the contract.
You Won’t Own the Car
Purchase of a car transfers title to you whether or not necessary payments have been partially paid or made in full. In leasing, however, it is different. The vehicle’s ownership belongs to the lessor or the lender. The payments raised in a lease agreement are meant to take care of the depreciating value as a result of the usage of the car. Payments made in the Memphis car lease agreements are lower compared to other lease arrangements, and the contract is fashioned in a way that you cannot mortgage or sell the vehicle.
Leasing Cuts down Up-Front Costs
The general trend in the market is that car purchasing agreements require a trade-in of another vehicle or a down payment as part of the financing options. Memphis car leases require an initial monthly payment as well as other taxes and fees to be settled by you, the leasing party. No down-payments are a prerequisite in a leasing arrangement. However, you could make a higher initial deposit if you are comfortable with that plan.
No Need to Worry About Selling Car Leases
Potential buyers of used cars, in most cases, offer a lower value than the asking price. It would also cost the seller to have a well-maintained car to fetch more during the sale. Leasing eliminates this hustle because you are not the owner of the vehicle. Selecting a car with a higher resale value before entering a lease agreement, therefore, becomes an issue you do not have to consider when factoring the vehicle you want the lease.
Car purchasing contracts have a term that applies to all such contracts. The last payments made effect the transfer of title to you the buyer. Lease agreements are different. It is true that some lease agreements allow for the purchase of the vehicle after the last payments, but for most, the final installment terminates the lease agreement, and you are free to get into another lease arrangement.
Knowing your options helps you to make an informed decision.