Car leasing: Five essential do’s and don’ts
Many drivers today consider leasing a car rather than purchasing one outright. A lease is similar to a long-term car rental, where the driver makes monthly payments over a specific period without acquiring ownership of the vehicle. They make lease payments as much as they would for a car loan, but when the payment term ends, the dealership takes possession of the car once again.
1) Learn the benefits of leasing
People often visit genesis of west houston to look at new and used cars. When they see the price of a new car, they consider other options. They appreciate the fact that a lease comes with a lower down payment and allows them to upgrade their vehicle every few years. Some dealerships don’t require any down payment whatsoever. Experian states that the drivers can expect to pay approximately $143 less a month if they lease a car rather than purchasing it outright.
2) Research the differences between leasing and financing
While this may sound appealing to many people, there are certain things drivers must know before leasing a car. Leasing is not the same as financing, and the individual must understand the similarities and differences between the two. With this information, they can determine which option is best suited to their needs.
3) Understand the lease terms
A driver must be familiar with the lease terms before signing any paperwork. The jargon contained in these documents often confuses many people, leading them to sign a document without fully understanding what is required of them. They need to understand the special leasing terms and their meanings before visiting a dealer, to avoid any issues when they find the perfect car.
4) Learn the terminology
The MSRP, or Manufacturer’s Suggested Retail Price, is a price set by the manufacturer that the lessee cannot negotiate. It is standard. However, this individual may negotiate the capitalized cost or the price the dealership is selling the car for. Most dealers require drive-off fees, which are essentially payments that must be made before taking possession of the car. These fees may include a down payment and sales tax on the vehicle.
The lease documents refer to the residual value of the vehicle, which is the expected value of the car at the end of the lease term. These documents include a buyout price, which is the amount the driver pays if they choose to purchase the vehicle upon lease termination. An acquisition fee will also be charged to cover any administrative costs associated with the lease.
5) Compare offers
Every driver needs to shop around to ensure they get the best deal on a leased vehicle. Lease companies offer different terms and payment options, so a driver should never assume that they will get the same deal regardless of where they go. Begin this comparison by determining which dealerships have a car in stock that the driver would like to possess. Talk with a minimum of three dealerships to obtain quotes and compare the terms and conditions of each lease agreement. Third-party lenders may also offer lease options; therefore, they should be researched as well.
When comparing quotes, ensure they include all fees, including the manufacturer’s suggested retail price and capitalized cost. The quote should share all drive-off fees, the monthly payment after taxes, and the residual value. Use these quotes to negotiate with dealers and obtain the best deal. Individuals with good or excellent credit will often find that a dealer is willing to match or beat a competitor’s offer to get the driver’s business. It never hurts to ask.
