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Discerning your vehicle lease agreement terms and definitions can seldom be identified as an intuitive accomplishment, especially for many of us that have a preference for non-legalese, to be sure we understand. First and foremost, leasing is not buying. To be honest, it’s most like a rental. As you might imagine, the most essential contract terms deal with ownership, liability, and responsibility. Including insurance, wear and tear, and lease return or extension.
Read More: Lease or Buy?
Insuring a leased vehicle is the same as getting insurance on any other type of vehicle. When it comes to leasing, however, the agreement typically obligates the lessee to have a specific level of minimum coverage. To be clear, the leasing business owns the vehicle, the lease lays out rules that lets you use it for a set period of time. One of these conditions is full protection, aka, full coverage insurance.
Specifically what is designated as normal vs excessive vehicle wear usually is clarified in a normal vehicle lease. This is very critical because when you trade in your leased car you may be billed for wear and damage that is outside of the coverages. Now, if that makes you uncomfortable, then be sure to inquire about additional Insurance to take life’s ambiguity out of the thought process.
Before the end of the agreement, we recommend contacting the dealership you are leasing from and establishing your end of lease procedures. While scheduling a lease return inspection, you may also want to request an auto lease buyout or lease extension. One allows you to extend your lease for a longer time, while the other permits you to buy your leased truck, or SUV.
Normal wear on a leased car is gauged by the contractual terms in the vehicle lease agreement. Generally speaking, regular wear and tear is expected and something that is easily replaced.
A car lease extension lets you extend your existing lease for an additional amount of time. There are several factors but this could be 6 months, 12 months, or even month-to-month. The best way to find out is to ask.
You certainly can use your current vehicle on trade. Applying the equity from the trade will lower your monthly payment, but it won’t change the cost of the lease.
