When it’s time to purchase a new vehicle, leasing has many benefits over buying a new car. As retail prices rise, leasing allows you to drive the vehicle of your dreams while maintaining a reasonable monthly payment. Even better, maintenance costs are reduced or eliminated. You will have the opportunity to drive a car that’s perpetually under warranty, so any repair costs will be covered. And of course, the lease will likely end before any major repairs are service events need to be scheduled.
If you’re not sure where to start, don’t worry. Leasing doesn’t have to be complicated. Below are the most important factors involved with leasing a new vehicle.
Your Payments Reflect the Car’s Value.
Similar to purchasing a car, your monthly payment is dependent on the sale price of the vehicle. Luxury cars will have a higher lease payment than compact cars. Therefore, to maximize your savings, you should look to lease a vehicle that’s within your price range.
Higher Residual Percent Saves You Money.
A second factor that influences your monthly payment is the residual value percent. AutoTrader.com provides a helpful explanation of this factor. In short, the higher the value of your vehicle will be at the end of your lease, the lower your payments will be. If you want a low monthly payment, you should target a vehicle with a high residual value percent.
Understand Your Set Miles.
One of the differences in a lease and purchase plan is that a leased car has a limit on the number of miles that can be driven. If you exceed the miles allowance, you’ll be charged a per-mile overage fee. It’s critical to understand both the mileage cap as well as the potential penalty.
Expect a Disposition Fee.
At the end of the lease, you will be asked to pay a disposition fee. This fee typically falls between $300 and $500, and it’s due upon vehicle return. This charge is often used to offset the expenses of cleaning, reconditioning and reselling the vehicle, and it’s generally required.
Understand What Money Factor Means.
Anytime you borrow money, you will have to pay interest on that money. In a lease, that’s called your money factor. To translate this to the more common “Average Percentage Rate” or “APR” terminology, you can multiply the money factor by 2,400. Whichever method you prefer, the key is to get the lowest interest rate possible in order to keep monthly payments low.
Is it Better to Lease or Buy a Car?
Obviously, if you’ve reached this page, you need a car. While Nashville care leases can be great options, Zoomr believes you should have a complete understanding of your options before signing any papers.
You Won’t Own the Car.
The biggest benefit to taking on a Nashville car lease is that you’ll have lower monthly payments. However, the lender will continue to own the vehicle. You will not be able to sell or borrow against a car that you lease.
Leasing Cuts Down Up-Front Costs.
Another important benefit to leasing is that your up-front costs are minimized. If you purchase a car, you’ll be required to offer a trade in or make a down payment. When you choose Nashville car leases, no down payment is required. All you need is the first month’s payment, security deposit, and minimal fees and taxes. Of course, if you have extra money, you can lower your payments with a larger up-front fee, but it’s not required to do so.
No Need to Worry About Selling Car Leases
When you lease a car, there’s no hassle at the end of your lease. You simply turn in the car. If you opt to purchase a car, selling that car after years of use can be a challenge. It can be difficult to get market value for used vehicles, and it’s sometimes hard to find potential buyers.
Understand End Payments.
At the end of a lease, you often have the option to purchase the vehicle; however, it won’t automatically be yours. Alternately, if you purchased the car, that final end payment would make it yours. You would receive the title to the car, and then be free to do with it what you wish.
There are many benefits to leasing a vehicle, and with a little bit of research, it’s easy to understand the process. Simply consider the factors above, and you can afford the car of your dreams through a simple, hassle-free lease agreement.