Today, a good number of cars are sold under the lease agreement. Well, it’s the low monthly payments that entice buyers to opt for a car lease as it saves them from large cash outlay and also gives them the opportunity to drive new cars. However, with the idea of the lease, you don’t build equity in the vehicle but it can be a good option for the right person. So before you consider leasing a car, you must take note of these 5 things:
- Leasing A Car Is Negotiable, Remember This: It’s not like your car loan that comes from the bank. The lease is given by car manufacturers and anyone who intends to adopt this idea must negotiate to grab the best deal. If you take time to negotiate, it can completely waive off small fees like tire and document fees etc.
- While Leasing A Car, You Are Free From Depreciation Risk: When you lease a vehicle, its depreciation risk shifts from you to the manufacturer. However, this risk is shifted back onto the customer on down payment. Also, if you terminate the lease before the end of the lease period, you will lose all the benefits associated with down payments. Here, to keep the lease in your favor, putting no money down is an important strategy.
- Leasing Will Incur Extra Insurance Costs: No doubt, leasing comes with lower monthly payments as compared to buying a car using conventional financing methods, but this advantage is often lost due to high insurance costs. So to protect yourself financially, you should avail gap insurance in addition to traditional car insurance.
- Leasing Comes With A Lot Of Fees: You will have to pay at least three substantial fees during the course of your lease. This will constitute an acquisition fee, which is not a down payment, dealership’s fee, and the last fee is either a disposition fee or a purchase option fee.
- You Will Have To Bear The Repair Expenses Of The Leased Vehicle: Yes, the repair and maintenance of the leased vehicle is your responsibility. You might get free tire rotation or oil changes from the dealer but you will have to pay for other maintenance.
Hope the above-listed things will help you with your car leasing. If you still have doubts, leasing companies like Location Paramount are always on the forefront to serve their potential customers.