Do you want to know what is vehicle leasing? or how does leasing work, then you’re in good company? Not everyone is familiar with all the pros and cons of leasing a car. In fact, there are many car leasing options available.
In the most basic terms, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed period of time. Many car and truck dealers offer vehicle leasing as an alternative to traditional auto financing or purchase. It is widely utilized by businesses when acquiring business vehicles. Generally speaking, leasing a car costs less than buying, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to buy or lease a car.
Today we are going to look at our ten most frequently asked questions regarding auto leasing.
The benefits of leasing a car are unique. You cannot get them with other auto financing offers. These benefits include not having to trade or sell an old car or truck, lower payments, and maintenance provisions. For even more details on the benefits of leasing, our auto finance department is on hand to answer all of your questions.
Deciding whether to lease or buy depends on many factors. If you drive a lot of miles annually and like to keep your vehicles for longer than three years, leasing won’t be very beneficial for you. 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. Basically, 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 into 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 actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among car dealers 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.
Many manufacturers and dealerships offer zero-down lease deals. Of course, there are varying factors that qualify or disqualify customers from these types of leases. Factors such as credit payment history, credit scores, etc. Just don’t forget that paying nothing down typically means bigger monthly payments. Car leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly.
Most auto leasing contracts have buy-out clauses in them in the event that you fall in love with your car and decide to finance it. Please note that the purchase price of the vehicle may vary. This depends on the residual value of the vehicle after the lease agreement has expired. There are options to purchase your leased vehicle prior to the completion of the contract. For this, however, you must speak with a financing representative. Only they can provide this exact info and take care of any early termination fees that may apply.
Usually, a deposit is only refundable at the conclusion of a 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 exact same thing as a down payment. A down payment is not refundable but security deposits typically are. Also, note that 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.
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.
Generally speaking, a credit score lower than 619 is classified as “subprime”. While a subprime borrower won’t typically be automatically declined, a credit score lower than 619 means you will likely have to pay a higher interest rate and/or down payment. Luckily, there are a lot of steps you can use to improve your credit score like apply for too many loans, employment history, and consistent on-time payments.
One of the more popular benefits of leasing a car is the maintenance provisions available in most lease agreements. Specifics will vary within individual lease contracts, but almost all leases will cover your leased vehicle’s normal maintenance and service needs. These include a filter and fluid changes, regular tune-ups, and regularly scheduled maintenance typically doesn’t cost 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 Hyundai into any authorized Hyundai dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
If you have more questions about our current promotions, vehicle lease offers, or related topics, then contact us today. Our team of highly knowledgeable car leasing agents is waiting to answer all your questions.
