What You Need to Know Before Leasing a Car
Car leasing has become more popular than ever before. One of its greatest advantages is that it allows you to drive a brand new car every few years, without having to pay a ludicrous amount of money at once. Still, even though it might be very tempting to some, there are a few drawbacks to car leasing that are important to take into account, especially if you are new to it. Here is what we think you should know about car leasing before you decide to take a step in that direction:
- KNOW YOUR HABITS
Before deciding to follow through with your decision to lease a car, stop and think about yourself and your driving habits. Many additional fees may arise when you return the car back to the dealership if you weren’t careful enough. For example, there is a certain limitation when it comes to the car’s yearly mileage, and if you know you are going to do more than that, be prepared to pay extra cash in the end (usually $.15 per mile).
- THE PRICE IS NOT FIXED
Even though most of you think that the leasing prices are non-negotiable, they actually are. Individual dealerships determine the car’s selling price, so we would even advise you to negotiate, and if you fail to settle on a price, no one will sue you if you walk away.
- DOWN PAYMENT IS NOT A MUST
By all means, try to avoid agreeing on a down payment. One of the most important pros of leasing a car is that the depreciation doesn’t affect you, but the manufacturer. If you put the money down, than the depreciation risk falls into your lap again.
- DO NOT LEASE FOR LONGER THAN 4 YEARS
Of course, after your contract expires, you will have the opportunity of buying the car if you’re still madly in love with it. However, if you decide to sign a lease for more than 4 years, be prepared for even more expenses. No matter what car you choose, after 4 years, you will have to invest more money for maintenance purposes.
- GAP INSURANCE
Gap insurance is extremely important, especially if your car gets stolen or totaled. Gap insurance allows you to buyout the lease earlier, because it covers the difference between the car’s cash value and the owed lease amount. If the deal doesn’t include Gap insurance, make sure you get one.
Prior to driving your new car off, there are many additional fees you are likely going to have to pay. Some dealerships charge a lot of money just to get the car delivered to the dealership lot, than you have the acquisition fees (financing fees), mileage overage fees, disposition fees at the end of the lease, etc. Leasing a car isn’t just regular monthly payments.
You can also lease cars for your business. There are a few great companies out there that could provide you with amazing leasing solutions, either for personal or business purposes.