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Do you want to know what is vehicle leasing? or how does leasing a vehicle work, then you’re in good company. Not everyone is familiar with all the pros and cons of leasing a car. There are, in fact, many auto leasing options available.
In general, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed time period. Auto dealers offer vehicle leasing as an alternative to traditional auto financing or purchase. It is widely used by companies when acquiring a company vehicle. Generally speaking, leasing a car costs less than buying, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to buy or lease a vehicle.
Let’s examine our ten most commonly asked questions regarding vehicle leasing.
There are many benefits of leasing a car that you just can’t get with other auto financing offers. Benefits like maintenance provisions, not needing to trade-in or sell an old vehicle, and lower payments. For even more details on the benefits of leasing, our car finance department is on hand to answer all of your questions.
The short answer to this question is: ‘it depends’. Do you drive a lot of miles annually? Do you like to keep your vehicle for a long time? If so, then car leasing might not be your best option. However, if you enjoy getting a new car, truck, or SUV every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Basically, the difference between auto leasing or buying really comes down to your financial, automotive, and personal priorities.
Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it’s already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.
Are you wondering how much it costs to lease a car? If you’re wondering how much does it cost to lease a car, the good news is that it’s negotiable. Many manufacturers and dealerships offer zero-down lease offers. Like any financial product there are varying factors that qualify or disqualify individuals from these kinds of leases. Factors such as credit payment history, credit scores, etc. Just keep in mind that paying nothing down typically means greater monthly payments. Car leasing, like traditional auto financing, works like this: the bigger the down payment, the lower the monthly payment.
Yes, you actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among car dealers but most dealerships do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles on the odometer.
The majority of auto leasing contracts have buy-out clauses in them in case you fall in love with your vehicle and would like to finance it. Please note that the purchase price of the vehicle may vary. This depends on the residual value of the vehicle when the lease agreement has expired. There are options to purchase your leased vehicle prior to the completion of the contract. For this, however, you will need to speak with a financing manager. Only they can provide these buy-out details and take care of any early termination fees that may apply.
Typically a lease deposit is only refundable at the termination of a lease. At least this is true when all leasing contract requirements have been met. Please note that a deposit (a.k.a. a security deposit) is not the exact same thing as a down payment. Down payments are not refundable but security deposits typically are. Also note that some leases require non-refundable deposits. Be sure to read your lease agreement carefully and ask as many questions as you have before you sign on the dotted line.
While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don’t worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team.
Generally speaking, credit score of 619 or lower is classified as “subprime”. While this type of credit isn’t automatically declined, a credit score lower than 619 means you will likely have to pay a higher interest rate and/or down payment. Luckily, there are many steps you can utilize to improve your credit score like making on-time payments, consistent employment history, and applying for loans too many times.
Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It’s probably obvious, but you can’t turn a leased car into any other brand of dealership. You can, however, turn your leased Chrysler Jeep Dodge Ram into any authorized Chrysler Jeep Dodge Ram dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
One of the more popular benefits of leasing a car is the maintenance provisions available in most lease agreements. Of course, specifics will vary within individual lease contracts, but most leases will cover normal wear-and-tear service and maintenance needs for your leased vehicle. These include filter and fluid changes, normal tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
If you have more questions about vehicle leasing or our current offers, then contact us today. Our team of highly knowledgeable car leasing agents are standing by to respond to all your questions.