Vehicle Leasing 101 - Top Ten Car Lease FAQs
What is Vehicle Leasing? How Does Leasing a Car Work?
If you're wondering what is car leasing, or how does leasing work, then you're in good company. Some of us may not be familiar with all the pros and cons of leasing a car. There are, in fact, many auto leasing alternatives available.
In general, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed period of time. Auto dealers offer vehicle leasing as an alternative to traditional auto financing or purchase. It is commonly utilized by companies 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 non-customization agreements, that can determine whether it is better to lease or buy a vehicle.
Today we are going to look at our ten most frequently asked questions regarding auto leasing.
Is It A Good Idea to Lease a Car?
Am I Better Off Buying or Leasing a Car?
Is There Such a Thing as Used Car Leasing?
How Much Does Car Leasing Cost?
Will I Get My Deposit Back When Auto Leasing?
May I Buy the Car I am Leasing?
Can You Lease A Car With Bad Credit & No Money Down?
What Credit Score Do I Need To Lease a Car?
Can I Turn In My Leased Vehicle To A Different Dealer?
Is Maintenance Included With My Car Lease?
The benefits of leasing a car are unique. You cannot get them with other auto financing offers. Benefits like maintenance provisions, not needing to trade-in or sell an old vehicle, and lower payments. For even more details on the benefits of car leasing, our vehicle finance department is waiting to answer all of your questions.
The short answer to this question is: 'it depends'. 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, truck, or SUV 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. Basically, 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.
Yes, you can lease a used car. This type of 'used car leasing' is a little known 'secret' among auto dealership but most do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with fewer than 48,000 miles.
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. Many manufacturers and dealerships offer zero-down lease deals. Like any financial product 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 nothing down typically means greater monthly payments. Vehicle leasing, like traditional auto financing, works like this: the bigger the down payment, the lower the monthly payment.
Usually a lease deposit is refundable at the termination of the lease. This assumes that all the leasing contract requirements 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 diligently and ask as many questions as you have before you sign on the dotted line.
The majority of auto lease contracts have buy-out clauses in them in the event that you fall in love with your car and would like to finance it. Keep in mind the purchase price of the car may vary. This depends on the residual value of the vehicle when the lease agreement has expired. There are also options to purchase your leased vehicle prior to the completion of the contract. For this, however, you must speak with a financing manager. Only they can provide this exact info and take care of any early termination fees that may apply.
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.
Typically, a credit score lower than 619 is classified as "subprime". While this type of credit won't typically be automatically declined, a credit score lower than 619 means you will typically have to pay a higher interest rate and/or down payment. Luckily, there are various steps you can utilize to improve your credit score such as making on-time payments, consistent employment history, and applying for loans too many times.
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 Toyota into any authorized Toyota dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
One of the more popular benefits of leasing a car is the maintenance provisions available in most lease agreements. Specifics may vary within individual lease contracts, but almost all leases will cover normal wear-and-tear service and maintenance needs for your leased vehicle. These include fluid and filter changes, regular tune-ups, and regularly scheduled maintenance typically doesn't cost anything out of pocket.
Contact a Car Leasing Expert TodayIf you have more questions about vehicle leasing or our current offers, then contact us today. Our team of leasing specialists are on hand to respond to all your questions.
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How to Get Approved for Car Leasing | Gene Messer Toyota