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Leasing a car can seem confusing and daunting, but it doesn’t have to be. Understanding what a lease is, knowing the advantages associated with leasing, and obtaining valuable tips before you sign can all make the process easier and smoother. Here are just a few things you should know about leasing in 2019.
What Exactly is a Car Lease?
A lease is driving a car for a fixed period for an agreed upon amount of money. It is a method that allows you to get into a new car without paying for the actual cost of the vehicle. You can drive the car for a specific “term,” usually two to five years, and then you return the car. It allows you to get a brand new car for a low monthly payment.
What Should I Know Before Leasing a Car?
Leasing will show up on your credit report as credit utilization the same as a traditional auto loan, so late or missed payments will negatively affect your credit score.
Unlike a traditional auto loan, however, you can negotiate a car lease. The leases come from the car manufacturer, not a bank. The car salespeople still want you to drive away in a new car, so you hold the upper hand.
You are responsible for any needed repairs on the car during the time that you have it. The good thing is that car leases are available on new cars which do not require much maintenance. Many dealerships will also offer free tire rotation and free or discounted oil changes.
Are There Advantages to a Lease?
Yes, there are many advantages to leasing a car. First, there is no money down which is a huge advantage to many people. Second, the lease shifts depreciation from you, the customer, to the car manufacturer. Third, payments are also usually cheaper on a leased car allowing you to get into a car that you ordinarily might not be able to afford.
Do You Have Any Tips Before I Try to Lease a Car?
You need to understand the language of a car lease. Capitalized cost is just the price of the vehicle. It is not the MSRP which will be the price on the car’s window.
Cap cost reduction is anything outside of the negotiation that will reduce the cost of the vehicle. This can include the value of a trade-in if you have one or lease deals that are currently being offered.
There are several different aspects of a car lease that you can negotiate. Some things that are included in negotiations are the capitalized cost, interest rate, and the buyout price. You also need to know how many miles you are going to drive per year so you can negotiate the annual miles you can drive.
Leasing a car is a great option for many people. If you don’t drive a lot of miles per year, it could be a good option for you. Stop by Rochester Ford today for a test drive in any of the vehicles that we offer; lease options are available!
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