Drivers love the option of leasing a car because it allows them a more flexible and affordable method of having a car. Retail car prices are currently prohibitively high for many drivers, and leasing allows you to drive at a fraction of the cost.
Not only is payment for the car itself easier, leasing keeps down costs at the auto mechanic’s. Leases will terminate before the warranty from the manufacturer, so the dealer will cover any damage incurred by normal driving. This saves you both time and money.
What Does Leasing a Car in Involve?
The contract involved in leasing a car is generally more complicated than buying a car. Listed below are a few things you should expect to see or keep in mind before you walk into the dealer.
Your Payments Reflect the Car’s Value.
Your monthly payment may seem arbitrary, but it’s based on a few different things, the most important one being the retail price of the car. The lower the price of the car, the lower your monthly payment will be and the more money you will save.
Higher Residual Percent Saves You Money.
Another aspect of your monthly payment is the residual percentage added by the dealer to cover the value lost as your car ages. One way to reduce your monthly payment is to try to negotiate a higher residual percent.
Understand Your Set Miles.
Included in every lease is a set amount of miles that you are allowed to drive every month. You will have to pay a certain amount for every mile you drive over this limit. Before you sign a lease, determine how many miles you drive per month on average, and ask your dealer what limit the contract stipulates. Also be sure to find out how much you will be charged if you go over.
Expect a Disposition Fee.
Your lease will also require you to pay a disposition fee when you return the car to the dealer at the end of your lease. The sum will likely be somewhere between $300 and $500.
Understand What Money Factor Means.
Many people are stumped by the term money factor. This is just another way of saying ARP. Make sure to go for a low ARP to ensure the highest amount of savings.
Is it Better to Lease or Buy a Car?
If you’ve made it this far, it’s probably safe to say that you’re in the market for a car. Now that you know some general aspects of Memphis car leases, you’ll have to decide whether it’s right for you. Zooomr’s philosophy states that you should know everything you can in order to make an informed decision. Leases are binding agreements, and you don’t want to make this decision lightly. The following are pros and cons of leasing.
You Won’t Own the Car
Though you are paying money for your car much like you would if you purchase it with financing, you do not own it. As such, there are limits to what you can do with it that will be decided in your lease. While Memphis car leases offer low monthly payments, you also will not be able to sell or mortgage your leased car.
Leasing Cuts Down Up-Front Costs
If you buy a car new, you will have to put down thousands of dollars in initial payments, and you’ll likely still be paying monthly costs for financing. With leasing, you don’t need to sweat about paying so much at a time. With Memphis car leases, you just need to pay for the first month, a security deposit, an acquisition fee, and other taxes and fees. You will also have the option to put down a payment that is affordable for you in order to reduce your monthly payment, but that is completely voluntary.
No Need to Worry About Selling Car Leases
Unlike when you buy a car, when the time comes to get a new one, you won’t need to worry about selling your old one. This means you don’t need to worry about your car’s future resale value and you won’t have to waste time and energy negotiating a sale when the time comes to upgrade. Leasing a car, you will simply need to bring it back to the dealer when your contract is up.
When you buy a car with financing, you own the car outright after your final payment. That is not the case with leasing. After your final payment on your lease, the car does not automatically become yours. You will likely have the option to buy it at a price determined by the dealer, but that is something to negotiate after your contract concludes. If you do not opt to buy the car, you will have to return it to the dealership.