Vehicle Leasing 101 - Top Ten Car Lease FAQs
How Does Vehicle Leasing Work? What is Car Leasing?
Do you want to know what is vehicle leasing? or how does leasing a vehicle work, then you're in good company. Some of us may not be familiar with all the benefits of leasing a car. In fact, there are more than a few auto leasing alternatives available these days.
In general, vehicle leasing is the rental of a car for a fixed time period. Many car and truck dealers offer vehicle leasing as an another option to traditional auto purchase or financing. It is often utilized by businesses when acquiring a company vehicle. Generally speaking, leasing costs less than buying a car, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to lease or buy a car.
Let's examine our ten most commonly asked questions regarding vehicle leasing.
Is Leasing a Car a Good Idea?
There are many benefits of leasing a car that you just can't get with other auto financing offers. Benefits like not having to trade or sell an old car or truck, lower payments, and maintenance provisions. For more details on the benefits of leasing, our car finance department is standing by to answer all of your questions.
Am I Better Off Buying or Leasing a Car?
Deciding whether to lease or buy depends on many factors. 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 look forward to getting a new car 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. Essentially, 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.
How Much Does Car Leasing Cost?
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. Most dealerships and manufacturers offer zero-down lease offers. Of course, there are varying factors that qualify or disqualify customers from these types of leases. Factors like credit scores, credit payment history, etc. Just remember that paying zero down typically means bigger monthly payments. Vehicle leasing, like traditional auto financing, works like this: the bigger the down payment, the lower the monthly payment.
Is There Such a Thing as Used Car Leasing?
Yes, you actually can lease a used car. This type of 'used car leasing' is a little known 'secret' among auto dealership but most dealers 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.
Can You Purchase The Vehicle You Are Leasing?
Most auto leasing contracts have buy-out clauses in them in case you fall in love with your car and would like to buy it. Please note that the purchase price of the car may vary. This depends on the vehicle's residual value after the lease agreement has expired. There are also options to purchase your leased car before the contract has been fulfilled. For this, however, you will need to speak with a leasing manager. Only they can provide this exact info and take care of any early termination fees that may apply.
Will I Get My Deposit Back On Auto Leasing?
Normally a lease deposit is only refundable at the end of the lease. At least this is true when all leasing contract obligations have been met. Keep in mind that a deposit (a.k.a. a security deposit) is not the same thing as a down payment. Down payments are not refundable but security deposits typically are. It is important to note some leases require non-refundable deposits. Be sure to read your lease agreement carefully and ask questions before you sign on the dotted line.
What Kind Of Credit Score Do You Need To Lease A Car?
Typically, a credit score lower than 619 is classified as "subprime". While a subprime borrower won't typically be automatically declined, a credit score lower than 619 means you will most likely have to pay a higher interest rate and/or down payment. 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.
Can You Lease A Car With Bad Credit & No Money Down?
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.
Can I Turn In My Leased Vehicle To A Different Dealer?
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 Buick GMC into any authorized Buick GMC dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
Is Maintenance Included With My Car Lease?
One of the more popular benefits of leasing a car is the maintenance provisions available in most lease agreements. Specifics may vary within specific lease contracts, but almost all leases will cover your leased vehicle's normal maintenance and service needs. These include fluid and filter changes, regular tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
Request More Info About Vehicle Leasing Today
Do you have more questions about vehicle leasing, current promotions, or related topics? Then contact us today. Our team of highly knowledgeable car leasing agents are standing by to respond to all your questions.
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