What is car leasing?
To even start talking about car leasing, it’s important that you know exactly what it is. Car leasing is, for many people, an alternative to buying. You lease the vehicle for a certain period of time, and when the lease expires, you must return it to the dealer.
Is it better to lease than to buy?
It is for some people. Leasing has some advantages compared to buying. It allows you to always drive the latest vehicle models and pay only half their price. Although there are those who prefer to be an owner, there are many others who prefer the advantage of always driving the latest generation vehicles.
How long is a lease period?
Car lease terms vary from dealer to dealer. However, the most common leases are for six to sixty months. Some leasing companies or dealerships allow you to purchase the leased car after that period ends. However, if you wish, you can make a new contract for a newer vehicle.
What are the Terms and Conditions for Leasing a Vehicle?
When you lease a vehicle, you are not only bound by a time period, you are also bound by a mileage allowance, which you must not exceed. In addition, you must pay a security deposit in case the vehicle is damaged by wear and tear. If you return the vehicle in good condition, we will refund your security deposit.
What happens if you go over your mileage limit?
If you exceed your mileage allowance, you will be charged an additional fee for each mile exceeded. For this reason, if you drive a lot, leasing may not be the best option for you. There are many online car lease mileage calculators to help you predict excess mileage and associated fees.
What is the residual value of the leased vehicle?
The residual value of the leased vehicle is the anticipated value of the car at the time the lease term ends. This value is a key factor when deciding the monthly payments of your lease, since when you lease a car you pay for the portion of the car that you use.
What happens if your leased car is stolen or totaled?
If your leased vehicle is stolen or totaled, you will be required to pay all remaining payments plus the residual value of the vehicle. Most lease vehicles carry GAP insurance, which pays the difference between the actual cash value of the car and the outstanding balance on your lease.
What happens if you return your leased vehicle before your term ends?
Voluntary surrender of a vehicle is treated by most lenders as repossession. Therefore, it can negatively affect your credit score. Also, most leasing companies apply penalties and fees for early delivery of the leased vehicle.