If buying a car is too expensive or unrealistic, leasing might allow you to get on the road without completely depleting your budget. Car retail prices are on the rise and are expected to keep climbing, but leasing allows you an inexpensive, affordable alternative to buying. With low monthly payments, lease agreements have proven invaluable for many who need to drive, but don’t have the funds to put down an expensive down payment.
The savings don’t stop at the dealership. Leases generally terminate before the car’s manufacturer warranty. This means that it won’t fall on you to fix any damage inflicted on the car from normal driving. Save time and rest assured that any normal wear and tear will be covered by the dealer.
What Does Leasing a Car in Involve?
If you are thinking about leasing a car, understand that involves a few things you might not expect. Continue reading and discover what you’re likely to encounter when going over your lease agreement.
Your Payments Reflect the Car’s Value.
To begin, the amount you are required to pay each month is decided mostly by the retail value of the car. Cars that have lower retail prices will also come with lower monthly payments.
Higher Residual Percent Saves You Money.
There’s more to the monthly payment than that. Also included is the residual percent, which dealers include to offset the depreciation in your car’s value over time. People often don’t realize that if you opt for a higher residual percentage, you’ll lower your monthly payment.
Understand Your Set Miles.
Every lease will also decide how many miles you are allowed to drive every month. If you go over this threshold, you will be charged on a per mile basis. Try to calculate how many miles you drive in a given month and make sure you negotiate your mile limit accordingly. Also determine how much you will be charged per mile beyond the limit.
Expect a Disposition Fee.
You’re going to be paying more than your monthly amount when you first get your car, but you’ll also be paying when you return it. This is called a disposition fee, and most dealers require this in a contract. It usually falls between $300 and $500.
Understand What Money Factor Means.
Your money factor is just another way for dealers to write ARP. Shoot for a low money factor, and you’ll be saving big time.
Is it Better to Lease or Buy a Car?
Now that you have the gist of leasing, it’s time to figure out if it’s right for you. If you’ve read this far, it’s clear you need a car. Zooomr firmly believes that, before you make any binding agreement, you need to read the fine print. Consider the following before you make your decision.
You Won’t Own the Car
Leasing a car is similar, but not the same, as owning one. All leases come with limits and regulations of some kind. It is true that Memphis car leases allow for affordable options, but because you are not the owner, you can neither sell nor mortgage your car.
Leasing Cuts Down Up-Front Costs
Instead of putting down thousands up front to buy a car, Memphis car leases allow you an affordable alternative. To drive a car away from the dealer, you will need to pay the following: the amount for the first month, an acquisition fee, a safety deposit, and a few other taxes and fees. If you would like to make an initial down payment on your lease to lower your monthly payment, you are both allowed and encouraged to do so, but it is not necessary.
No Need to Worry About Selling Car Leases
If you’re buying a car, you need to consider its resale value in the future so that you can maximize returns on your investment. Selling also eats up a good deal of your energy and time. When you lease, you can rest assured that you will not have to go through the ordeal of selling your car. After your contract expires, you must simply take the car back to the dealer.
One point of common confusion on car leases is the end payment. If you buy a car with financing, your end, or final, payment means that you now own the car. With leasing, your final payment marks the end of your contract instead. If you have grown attached to the car over the years and hope to buy it, the dealer will generally allow you to do so at a price determined by them. If you do not intend to buy it, however, you will have to bring it back to the dealer.