Generally speaking, vehicle leasing is the rental of a car for a fixed period of time. Automotive dealerships offer vehicle leasing as an alternative to traditional auto financing or purchase. It is widely utilized by businesses when acquiring business vehicles. In general, leasing a car costs less than buying a car, although there are several restrictions, such as mileage limits and customization agreements, that can determine whether it is better to lease or buy a car.
Today we are going to look at our ten most frequently asked questions regarding vehicle leasing.
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Is It Better to Lease or Buy a Car?
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 look forward to 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 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 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.
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Is Leasing a Car a Good Idea?
The benefits of leasing a car are unique. You cannot get them with other auto financing offers. These benefits include maintenance provisions, not needing to trade-in or sell an old vehicle, and lower payments. For more details on the benefits of leasing, our car finance department is standing by to answer all of your questions.
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How Much Does Car Leasing Cost?
Most dealerships and manufacturers offer zero-down lease offers. Like any financial product there are varying factors that qualify or disqualify customers from these types of leases. Factors such as credit payment history, credit scores, etc. Just keep in mind that paying nothing down typically means higher monthly payments. Auto leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
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Is There Such a Thing as Used Car Leasing?
Yes, you actually 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 on the odometer.
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Can One Buy the Lease Car?
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. Keep in mind the purchase price of the car may vary. This depends on the vehicle’s residual value after 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.
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Can One Get a Deposit Back From Vehicle Leasing?
Typically a deposit is refundable at the conclusion of a lease. At least this is true when all 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. 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.
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Can You Lease A Car With Bad Credit & No Money Down?
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.
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Does Car Leasing Require a Good Credit Score?
Typically, a credit score of 619 or lower is classified as “subprime”. While a subprime borrower won’t typically be automatically declined, a 619 or lower credit score means you will most likely have to pay a higher interest rate and/or down payment. 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.
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Can I Turn In My Leased Vehicle To A Different Dealer?
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 Mercedes-Benz into any authorized Mercedes-Benz dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
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Does A Car Lease Include Maintenance?
Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Specifics may 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, normal tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
Learn More About Car Leasing at Your Local Dealership
If you have more questions about vehicle leasing, current promotions, or related topics, then contact us today. Our team of highly knowledgeable car leasing agents are standing by to respond to all your questions.
