Leasing is a great option for those who need a car. It’s more cost effective, and it allows owners to upgrade for a fraction of the cost of buying a vehicle. It is not a secret that the price of automobiles is constantly increasing. Many are paying $40 thousand or more for a good car. Leasing is an attractive option because it allows people to get a car they normally could not afford. Budget conscious individuals should look at leasing as a viable option.
The good thing about a lease is that it lasts throughout the manufacturer warranty period. Less time at the mechanic’s office is always a good thing. Any service issues that the car was covered under warranty. Anyone looking for a car can see the value in a lease.
What Does Leasing a Car Involve?
Because leasing a car is different than purchasing one, here are some things you need to understand:
•The car’s value reflects the payment amount.
•If you want a lower payment, then you need to choose a car that has a lower value.
Higher Residual Percent Equals Savings
The residual percent is a common term used in a lease agreement. It’s a basic expression of the original sticker price of the car. This is not the sales price, but it helps dictate the end of lease terms and mileage requirements. Over the course of a three-year lease, a car will depreciate about 50 percent. The other 50 percent would be considered the residual percentage. To get a lower monthly payment, look for a vehicle that has a higher residual percentage.
Understand Your Set Miles
Each lease has a set number of miles that the car can be driven. During that term, if you go over the allotted mileage, you will be charged. The fee is so many cents per mile. You can purchase additional miles at the inception of the lease agreement, but you cannot change it during the terms. If you drive many miles, then you need to make sure the lease is a viable option for you.
Expect a Disposition Fee
If it helps you to understand the process, think of the lease and a rental car. You are renting the car from the dealer. You will pay a fee, called a disposition fee, when you are finished with the lease. Be prepared, as this fee is anywhere from $300-$500.
Understand What Money Factor Means
The most important factor in the lease is the money factor. It’s similar to the ARP when you purchase a vehicle. When you get the lowest money factor on your lease, you are saving the most money.
Is it Better to Lease or Buy a Car?
It’s obvious that you are looking for a vehicle or you wouldn’t be visiting this page. Consequently, you need to know that there is a big difference between buying and leasing a car. Memphis car leases a great option for many people, but they won’t work for everybody. You must know the details of the contract before you sign.
You Won’t Own the Car
A purchase is much different than a lease. When you buy a car, after the payments are paid in full, then you are free to do with it what you want. You can sell it or trade-it in or give it to the neighbor. When you lease a car, you are just renting the use of someone else’s vehicle. Memphis car leases provide a great option for those who don’t want the hassle ownership. You must turn the car back into the dealer at the end of the lease term, however, with a purchase the car is yours to keep.
Leasing Cuts Down Up-Front Costs
Purchasing a car is a big financial responsibility. You must make a down payment or have a trade-in of value. When you do a Memphis car lease, you don’t need to make a down payment. For a lease, you just pay the first month’s payment up front as well as the security deposit and acquisition fee. The more money you put down on the car, the less your monthly payment will be. Those who aim for a lower payment have that option to help with budgeting.
No Need to Worry About Selling Car Leases
When you are buying a car, once your loan’s terms are complete, the car is yours free and clear. You can sell it, trade it in or keep it. Selling a vehicle in today’s markets can be a challenge. No one ever wants to pay what they are worth. Trade-in values are laughable. To sell your car, people want to see that it has been properly maintained. When you lease a car, you don’t have to worry about selling it and all those hassles.
When you make your last payment on a loan, then you officially own the vehicle. You get a title to the car, which allows you to sell it to someone else. Leasing is different. You turn the car back in when the leasing term is complete. If you want to purchase the car, you can do so for a fair price. If you are over the mileage, then you will need to pay any difference to satisfy the lease terms.