ust about everybody needs a car for one reason or another, but with climbing retail prices, few can buy one, even with financing. Leasing allows you to keep a car in your garage without breaking the bank. Allowing you to make small, monthly payments, it’s one of the most affordable and flexible ways to have a car.
Leasing comes with a variety of benefits. For example, you won’t have to worry about making repairs for damage incurred during normal driving. Manufacturer warrantees extend beyond the period of the lease and insure that any repairs you need to make are covered by the dealer.
What Does Leasing a Car in Involve?
Leasing is great, but before you sign any contracts, you’re going to want to learn everything you can about the terms and details of the agreement. Listed below are a number of common aspects of leases:
Your Payments Reflect the Car’s Value.
The first thing to remember is that your monthly payment is determined in large part by the retail value of the car. If you go for a more expensive car, your monthly payment will be higher.
Higher Residual Percent Saves You Money.
Another aspect of your monthly payment is the residual percent added by the dealer. This addition accounts for the depreciation of value in your car as time passes. If you are able, consider increasing the residual percent; this will lower your monthly payment.
Understand Your Set Miles.
Every lease stipulates the maximum amount of miles you can drive on a monthly basis. If you go over, you will have to pay a certain amount for every mile beyond the limit. Before going in to the dealership, try to determine the average amount of miles you tend to drive in a month and factor that in to your negotiation. Be sure to ask your dealer the mile limit for your lease and how much you will be charged if you exceed it.
Expect a Disposition Fee.
When you return the car at the end of your lease, you will be charged a disposition fee. The fee normally falls between $300 and $500.
Understand What Money Factor Means.
Money factor is just another term for ARP. The lower your ARP or money factor, the lower your monthly payment will be.
Is it Better to Lease or Buy a Car?
So, you’ve learned a little about leases. Now it’s time to decide whether it’s a better decision to buy or lease. It’s easy to get excited and jump right it, but before you decide, make sure you know the different between leasing and buying so you can choose the option that is right for you. Memphis car leases often offer amazing, affordable leases, but Zooomr believes that it’s crucial to understand what you’re getting into before you make any binding decisions.
You Won’t Own the Car
For one, realize that leasing is not the same as owning a car. One way this is important is if you run into financial trouble. You will not be able to sell or mortgage your leased car.
Leasing Cuts Down Up-Front Costs
On the other hand, you won’t have to pay much money up front when you lease. Buying a car requires you to pay at least a significant chunk of the retail price, even if you’re financing. Leasing, however, allows you to drive a car off the lot with very little initial cost. The dealer will ask you to pay for the first month, a security deposit, an acquisition fee, a few minor fees and taxes, and that’s it. You will also have the option to put down some money up front to lower your monthly payment, but it is not required.
No Need to Worry About Selling Car Leases
Leasing eliminates the need to worry about selling your car when the time comes to get a new one. When buying, you need to worry about the resale value the car will have years down the road. When the time comes to sell, it will take a lot of time and energy from you as well. But with leasing, you simply need to return it to the dealership when your contract is finished.
If you purchase a car with financing, the end payment means you have paid for the car in full and you will receive a title to it. But the final payment in leasing represents the end of your contract. Many dealers will offer you the option to buy the car at a price adjusted for the use you have put into it. At that time, you may decide to buy it, but if you do not, you must return it to the dealer.