If you want to drive a new car, but don’t have the money to make large monthly payments, leasing a car may be your best option. Car leases are usually less expensive that purchasing. Car prices keep going up every year. Leasing makes it possible for you to afford a car you love without breaking your monthly budget.
A major advantage to leasing is that you get a new car that will not, more than likely, need any major repairs or service. Just routine maintenance. Plus, the car is under manufacturer’s warranty for the entire length of the lease. So, if something major happens, everything is covered by the warranty.
What Does Leasing a Car in Involve?
Now, if you want to lease a car, you will need to understand a few things before you sign the deal. Hera are a few things to consider:
Your Payments Reflect the Car’s Value.
Just like when you purchase a vehicle, your monthly lease payment will depend on what the car is worth at the time you start the lease. If you want to spend less, select a vehicle with a lower sale price.
Higher Residual Percent Saves You Money.
When dealers lease out cars, they include a residual value percentage into the monthly payments. That percentage helps cover the depreciation on the car. If you want lower payments, try to get the highest residual percentage possible.
Understand Your Set Miles.
To ensure the car retains its value, every car lease includes a certain number of miles the driver is allowed to use every month. For every mile driven beyond that limit, there will be a fee assessed. Before you sign anything, be sure to understand how many miles are allowed and what the fee is for every mile over the limit.
Expect a Disposition Fee.
When you return your leased vehicle, you will be expected to pay the disposition fee for the vehicle. That fee usually falls between $300 and $500. The exact amount will be specified in your lease.
Understand What Money Factor Means.
When you get a car loan, you are charged interest. The same goes for when you lease a vehicle. The only difference is that it is called the money factor. The lower it is, the less you pay.
Is it Better to Lease or Buy a Car?
This is probably the most common question someone asks when they start thinking about leasing a vehicle. It is important to know the differences between the two to determine which option is the best for you. The better understanding you have about the differences, the better the choice you will make.
You Won’t Own the Car
This is the biggest difference between buying and leasing. When you purchase a car, it is yours. Your name is on the title, even if you are making car loan payments. When you lease a car, you are only paying to use the vehicle. It remains the property of the leasing company. Leasing offers lower payments, but does not give you ownership.
Leasing Cuts Down Up-Front Costs
Buying a car involves significant up-front costs, especially if you need to finance it. You will need to provide money down. You can bring in another car to trade to cover some or all of that down payment. Then, you will need to cover fees and taxes on top of all that. With Memphis car leases, you do not need a down payment. All you will need to cover is the first month’s payment, the security deposit and some fees and taxes. You can opt to put money down to lower your monthly payments, but it is not required to get the lease.
No Need to Worry About Selling Car Leases
When you lease a car, you don’t have to worry about selling it or trading it in. That takes the burden of selling it off your shoulders. Selling a used car is tough. Potential buyers don’t want to pay much and they will haggle you down as much as possible. With a lease, you don’t have to worry about the car’s resale value or about attracting a buyer. It is not your job.
When you buy a car with financing, you will have an end payment somewhere in the future. At that point, you own the car. You get the title and can do anything you want with it. With a lease, it is a bit different. You can buy the car when the lease is over, but it does not automatically become yours. You have to return it if you don’t buy it.