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Car Lease Deals
The price of new cars rise with each passing year, which makes it much more attractive for consumers to lease a vehicle. For a small percentage of the cost, leased cars are a great way to get a new car with a limited budget. They save you money in other ways too. Repairs and routine maintenance are covered under the warranty of a leased car.
What does Leasing a Car Involve?
It’s vital that you understand exactly what’s involved in the process of leasing. While it’s much like renting a car for an extended period of time, there are certain pitfalls that you should be aware of before you sign the lease agreement. The following are a few aspects you should understand about leasing.
Your Payments Reflect the Car’s Value
The price of the vehicle directly impacts the amount you’ll spend each month on the lease. If you can’t afford one vehicle, you will have to choose one with a lower price. For example, you might love a car that costs over $25,000 but can’t afford the monthly payments. You’ll have to lower your standards to find a car within your monthly budget.
Higher Residual Percent Saves You Money
Vehicles depreciate the moment they leave the floor of the showroom. Along with the amount you’re paying for the leased vehicle, you’re also paying to cover that depreciation. If you want to save money monthly, ask for a higher residual percentage from the dealer.
Understand Your Set Miles
Your monthly lease amount will cover a certain amount of miles. When you pass those set miles, you’re going to be charged for the overage. Some leasing companies will base this on where you live and the commute to work. Other companies might have a set number of miles for every customer. Always know your miles, so you don’t go over them.
Expect a Disposition Fee
Leasing a car is like a long-term rental where you’re paying lower fees. At the end of the lease agreement, you’ll have to return the car and pay a disposition fee. It can range between $300 and $500.
Understand What Money Factor Means
This is the factor that will save you money, much like an ARP, so try to get the lowest that you possibly can from the leasing company.
Is it Better to Lease or Buy a Car?
This is a question that will depend on your knowledge of leasing as it relates to your circumstances. You’re the only one who knows whether it’s better for you personally to lease or buy. Decide if you’d like to pay a certain amount each month, which would be the same as purchasing a car through a finance company. Think about whether you want to return the car at the end of the lease agreement too. There are many factors in play with this decision.
You Won’t Own the Car
Buying a new car means that you’re paying the bank, but ultimately it’s your vehicle. With a leased car, it belongs to the leasing company, which means you can’t sell it. While the leasing company won’t take the car back, it’s not yours to do what you wish to it. That could include mortgaging the car too, which isn’t allowed.
Leasing Cuts Down Up-Front Costs
This is a good option for those who don’t have money to put down on a new car. The financing company requires a large down payment on most new cars, which isn’t required with leasing. You will be required to pay other fees and taxes though.
No Need to Worry About Selling Car Leases
When you’re ready to move on to another vehicle, you won’t have to worry about selling the car to another buyer, which can involve extensive maintenance and repairs before it’ll sell. You won’t have to advertise or find a buyer for the car.
With an end payment on a vehicle you purchase, it means you’re not paying the bank or finance company any longer. If you’re leasing a car, it means that you’re required to give the car back at the end of your payments. You can certainly pay for the car if you love it, but normally, it means that you’re giving the car back at the end of the payments.