What is Car Leasing - Frequently Asked Auto Lease Questions
What is an Auto Lease? How Does Leasing a Car Work?
If you're wondering what is car leasing, or how does leasing a vehicle work, then you're in good company. Not everyone is familiar with all the benefits of leasing a car. In fact, there are a good number of auto leasing alternatives available these days.
In general, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed time period. Automotive dealerships offer vehicle leasing as an another option to traditional auto financing or purchase. It is commonly used by companies when acquiring a company vehicle. Generally speaking, leasing costs less than buying, although there are several restrictions, such as mileage limits and customization agreements, that can determine whether it is better to buy or lease a car.
Let's examine our ten most commonly asked questions regarding auto leasing.
Is It A Good Idea to Lease a Car?
Leasing or Buying a Car - Which is Better?
Is There Such a Thing as Used Car Leasing?
What Does It Cost to Lease a Car?
Will I Get My Deposit Back When Car Leasing?
Can You Buy The Vehicle You Are Leasing?
Is It Possible to Lease a Car with Bad Credit & 0 Down?
What Kind Of Credit Score Do You 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 lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. For even more details on the benefits of auto leasing, our vehicle finance department is ready to answer all of your questions.
The short answer to this question is: 'it depends'. Do you drive a lot of miles annually? Do you like to keep your vehicle for a long time? If so, then car leasing might not be your best option. However, if you enjoy 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. Essentially, 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 actually can lease a used car. This type of 'used car leasing' is a little known 'secret' among auto dealership but most dealerships do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles on the odometer.
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. Most dealerships and manufacturers offer zero-down lease deals. Like any financial product there are varying factors that qualify or disqualify individuals from these kinds of leases. Factors like credit scores, credit payment history, etc. Just remember that paying zero down typically means higher monthly payments. Car leasing, like traditional auto financing, works like this: the bigger the down payment, the lower the monthly payment.
Usually a deposit is only refundable at the conclusion 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 questions before you sign on the dotted line.
Most auto leasing contracts have buy-out clauses in them in case you fall in love with your car and decide to purchase 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 these buy-out details 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 of 619 or lower 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 take to improve your credit score such as apply for too many loans, employment history, and consistent on-time payments.
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.
Maintenance provisions are one of the most popular benefits of leasing a car. Of course, specifics will vary within individual lease contracts, but almost all leases will cover your leased vehicle's normal maintenance and service needs. These include filter and fluid changes, regular tune-ups, and regularly scheduled maintenance typically doesn't cost anything out of pocket.
Ask About Our Auto Leasing Offers TodayIf you have more questions about vehicle leasing or our current offers, then contact us today. Our team of highly knowledgeable car leasing agents are waiting to respond to all your questions.
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How to Get Approved for Car Leasing | Sterling McCall Toyota