Have you always heard of people leasing cars but you’ve never actually take the time to understand them? Leasing a car is an easy and budget-friendly option for drivers who can’t quite afford a car payment to purchase a car. With leases you have options. You can have a lower monthly payment, and at the end of the lease, you get to decide whether you want to keep the car by purchasing it or lease a brand new, different car. Plus, the car stays under the manufacturer’s warranty during the length of the lease so any repairs needed on the car are covered.
What Does Leasing a Car in Involve?
As you consider taking on a car lease, consider these following points:
Your Payments Reflect the Car’s Value.
Your car price determines your monthly payment, in part. The higher the cost of the car, the higher your monthly payment.
Higher Residual Percent Saves You Money.
Your monthly payment also will be determined by the car’s depreciation rate, called the residual value percent by car leasers. Choose a higher residual percentage to pay less in monthly costs per month.
Understand Your Set Miles.
All car leases come under a contract for a certain amount of miles. If you drive a lot with your car – such as a traveling sales rep, for example – this might be an issue for you. You’ll want to keep an eye on your mileage, otherwise you could incur overage charges. Make sure you go over all the details before you sign your lease.
Expect a Disposition Fee.
When you sign a lease for a car, you’ll hear about a disposition fee you’ll need to pay when you return the car at the end of the lease. Start saving about $500 now. Most disposition fees range in the $300 to $500 range.
Understand What Money Factor Means.
Be prepared to try to get the lowest money factor you can, as this will lead to the biggest savings for you over the course of the car lease. Money factor is similar to ARP.
Is it Better to Lease or Buy a Car?
When you need a car, you shouldn’t have to make a rush decision. Your money is hard-earned and it doesn’t go as far as it should if you purchase or lease a car without thinking through all the details. Before you jump in with both feet, make sure you know all the details. Use Zooomr to understand whether it is better for your budget and lifestyle to buy or lease a car. Your Minneapolis lease or car is only a few steps away with Zooomr.
You Won’t Own the Car
When you buy a car, it is yours. If you lease a car, you are only borrowing it for the length of the lease. Minneapolis leases are going to ensure you have lower payments than if you were to buy a car, but at the end of the day, you are paying to use the car. You can’t sell the car if it’s not actually yours.
Leasing Cuts Down Up-Front Costs
There are many factors to consider when purchasing or leasing a car. For example, when you buy a car, you’ll need to put down money for down payment and/or trade in your current car. You’ll also finance it so that you can own it over the course of several years. When you lease a car, you don’t have to pay a down payment. Instead, you’ll pay the first month’s payment, a security deposit and several taxes and fees. You can put extra money for either option, but it is not necessary.
No Need to Worry About Selling Car Leases
When you are going to buy a new car, often you need capital to purchase it. That may mean you need to sell your car—and that can be challenging in this economy. Buyers in the market for a used car want as much of a deal as they can get—and they are going to be picky about the maintenance of the car. But when you lease a car, you never have to worry about having to sell it because it isn’t yours to sell! The dealer takes care of repairs under the manufacturer’s warranty and takes care of what happens to the car after your lease ends.
Your end payment is the final payment you make on a car you are purchasing. With the final payment in the bank, you’ll get the car title and you’ll own the car outright. From there you can do whatever you would like the car—including selling it. With leasing, you won’t get the car title with your final payment. Instead, have the option of purchasing your leased car—but you first must take it back to the dealership at the end of the lease.