Do you want to know what is vehicle leasing? or how does leasing work, then you’re in good company. Not everyone is familiar with all the pros and cons of leasing a car. In fact, there are a good number of auto leasing options available.
Generally speaking, vehicle leasing is the rental of a car for a fixed period of time. Automotive dealerships offer vehicle leasing as an alternative to traditional auto financing or purchase. It is widely utilized by businesses when acquiring a company vehicle. In general, leasing a car costs less than buying a car, although there are several restrictions, such as vehicle mileage limits and customization agreements, that can determine whether it is better to lease or buy a vehicle.
Let’s examine our ten most commonly asked questions regarding vehicle leasing.
The short answer to this question is: ‘it depends’. If you drive a lot of miles annual and like to keep your vehicles for longer than three years, leasing won’t be very beneficial for you. However, if you like 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 personal, automotive and financial 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.
The benefits of leasing a car are unique. You cannot get them with other auto financing offers. These benefits include lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. For even more details on the benefits of auto leasing, our car finance department is standing by to answer all of your questions.
Yes, you actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among auto dealership but most dealerships do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with fewer than 48,000 miles on the odometer.
Are you wondering how much it costs to lease a car? Well, the truth is that it’s negotiable. Most dealerships and manufacturers offer zero-down lease deals. Of course, there are varying factors that qualify or disqualify individuals from these types of leases. Factors such as credit payment history, credit scores, etc. Just keep in mind that paying nothing down typically means greater monthly payments. Vehicle leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
Normally a lease deposit is only refundable at the end of the lease. At least this is true when all leasing contract specifications 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. Therefore, read your lease agreement carefully and ask questions before you sign on the dotted line.
Most auto leasing contracts have buy-out clauses in them in the event that you fall in love with your vehicle and would like to buy it. Please note that the purchase price of the car may vary. This depends on the residual value of the vehicle after the lease agreement has expired. There are also 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.
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.
In general, credit score of 619 or lower is classified as “subprime”. While a subprime borrower isn’t automatically declined, a credit score lower than 619 means you will typically have to pay a higher interest rate and/or down payment. Luckily, there are various steps you can utilize to improve your credit score such as employment history, multiple loan requests, and consistent on-time payments.
Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Of course, specifics may vary within specific lease contracts, but most leases will cover your leased vehicle’s normal maintenance and service needs. These include fluid and filter changes, normal tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
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 MINI into any authorized MINI dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
Do you have more questions about vehicle leasing, current promotions, or related topics? Then contact us today. Our team of leasing specialists are standing by to answer all your questions.
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