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If you’re wondering what is car leasing, or how does leasing work, then you’re in good hands. Not everyone is familiar with all the benefits of leasing a car. There are, in fact, a good number of auto leasing options available these days.
Generally speaking, 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 used by businesses when acquiring business vehicles. Generally speaking, 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 buy or lease a vehicle.
Let’s examine our ten most commonly asked questions regarding vehicle leasing.
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 like 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 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.
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 on hand 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.
Most dealerships and manufacturers offer zero-down lease offers. Of course, there are varying factors that qualify or disqualify customers from these kinds of leases. Factors such as credit payment history, credit scores, etc. Just keep in mind 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.
The majority of auto leasing contracts have buy-out clauses in them in case you fall in love with your car and would like to purchase it. Please note that the purchase price of the vehicle may vary. This depends on the vehicle’s residual value after the lease agreement has expired. There are options to purchase your leased car prior to the completion of the contract. For this, however, you will need to speak with a financing representative. Only they can provide these buy-out details and take care of any early termination fees that may apply.
Typically a deposit is refundable at the end of the lease. This assumes that all the leasing contract obligations 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. It is important to note some leases require non-refundable deposits. Therefore, read your lease agreement diligently and ask as many questions as you have before you sign on the dotted line.
In general, credit score of 619 or lower is classified as “subprime”. While a subprime borrower won’t typically be automatically declined, a 619 or lower credit score 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 such as employment history, multiple loan requests, and consistent on-time payments.
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.
Maintenance provisions are one of the most popular benefits of leasing a car. Specifics may vary within individual 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 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.
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 waiting to answer all your questions.