For those people who like the idea of driving a new car but do not have the funds to purchase a new vehicle outright, leasing a car is a worthwhile consideration. With low monthly payments, new cars can be leased for a period of time, allowing the person to save and either purchase the vehicle at the end of the lease or hand it back. There is a lot to consider when leasing a vehicle in order to ensure you get the best deal for your money, so here are some essential car leasing tips to take on board.
One of the most valuable car leasing tips is to ensure that you understand everything that is involved with a lease before you sign a contract. Get to know what all the different terms and conditions mean and how much you will pay, and always scrutinise the details of the contract. There are different types of leasing arrangements available, such as one where you hand the car back at the end of the term, or another where you get the chance to purchase the vehicle, and usually the monthly payments vary for these different plans. Make sure you choose the right arrangement to suit your circumstances. Bear in mind also that not all dealers offer the same conditions and arrangements, so shop around to find the best package.
To Buy or Not to Buy
If you like the idea of purchasing the vehicle at the end of the lease period, make sure you start saving, because in addition to your monthly payments and a deposit you will need to make a balloon payment at the end of the contract.
Know the Costs
Working out and understanding the costs involved with leasing a car can be confusing, so make sure your dealer explains everything, including up-front payments, interest, taxes and any other fees that are payable. You can often get some great deals with low monthly payments, but check that there are no hidden catches which might make the offer less attractive than originally perceived. Ensure that you are in a position to make the monthly payments, as once you have signed the contract you are legally obliged to cover all the costs associated with the arrangement. Avoid using any dealers who are not transparent with their cost structures, and never be afraid to ask questions or get information clarified before you sign up.
Check to see whether the lease covers maintenance fees and what this entails during your contract period. If you prefer the idea of fixed budgeting during your lease, it can be worthwhile paying for maintenance fees as part of the contract so that you do not need to worry about paying for servicing or unexpected repairs during your ownership of the vehicle.
Insurance for your vehicle is something that needs to be considered when leasing a car. In most cases, you have to arrange this yourself, so always opt for fully comprehensive insurance. Many drivers who lease a vehicle also take out guaranteed asset protection, or GAP, insurance as an extra precaution. If your leased vehicle is stolen or written off during the rental period, depreciation means you probably will not get the original value back from the insurer, which could leave you in negative equity and owing the lease company more than the insurer pays out. Gap Insurance covers the difference between the original value and insurance pay-out, so it can offer drivers financial peace of mind.
Decide How Long You Want the Lease For
There are various lengths of lease available for cars, so decide which suits you best. Typically, many drivers opt for a three-year lease. Make sure that the entire lease period is covered by any warranty, and if it is not consider getting an extended warranty. You may be charged a fee if you decide to return the car early.
As well as length of the lease period, consider the mileage limits imposed by the contract. Make sure that the limit fits in with the amount of driving you expect to do during that period. Most leasing contracts vary between 12,000 and 15,000 miles per year, but bear in mind that if you do exceed the limits, you will be charged. Be wary of lease arrangements that offer very low monthly payments, as they may also come with very low mileage limits that may not be suitable for your needs. If you plan on driving your car overseas, check with the dealer beforehand to see what their policy is regarding this. In some cases, you may need to obtain written permission, and you may even incur a charge.
In most cases you probably will not be able to make any modifications to the vehicle during the lease period, but if there is something specific you have in mind, it never hurts to ask before you sign a contract. In a competitive market, a dealer may be willing to make modifications for you before the contract begins.
End of the Contract
It might not be the most obvious thing to think about before your contract has even started, but it is worth finding out what will happen at the end of the term. As well as discussing what your various options are for returning the car, extending the lease period or purchasing the vehicle, find out what the guidelines are for the condition of the vehicle at the end of the contract. Normal wear and tear is usually tolerated, but if there is any damage, you will be charged. Bear in mind also that the definition of what is normal wear and tear can vary considerably, so make sure you are completely clear what this covers right from the outset.
With so many things to consider when leasing a vehicle, it makes sense to do some research and find some car leasing tips to get the best deal possible.