Time Needed: 2-3 Hours, Difficulty: Beginner, Cost: Varies
Leasing a car is one of those things that not many people understand. Quite a few think that it’s an even way to funnel money out of your pocket into those of a dealership and others believe that leasing is the only way to go, but neither perspective is entirely accurate. Leasing can be a great way to have access to a vehicle for a set period of time, but it’s not right for every car buyer.
If you love having a new car and don’t drive all that much, leasing can be a great way to get a new car without having to buy it outright. As with anything, though, it’s important to do your research and know where you stand before heading to the dealership. Car Bibles‘ editors have leased quite a few cars over the years and are here to help you understand the basics.
Let’s get rolling.
The Safety Brief
You can’t get maimed leasing a car, but you can get rooked. Don’t be a turkey, follow our instructions and keep your wits about you.
- Do your research. The best way to know you’re getting the best deal is to shop around.
- Check your credit score and know your financial situation before heading to the dealer’s lot. It’s best to have a handle on what you can afford and on the rates you should be getting.
- Keep a handle on your personal information during this process and don’t send money to people you don’t know.
- Study the terms and conditions of the lease. Make sure you know how many miles you can drive and whether or not you’re on the hook for maintenance and repairs during the lease period.
The Documents You Need
Leasing a car won’t take a toolbox or blowtorch – keep those at home or this could turn into something completely different. You’ll need to gather documents and get your financial house in order, though. Before heading to lease a car, grab:
- Your credit score
- Income and banking information
- Your trade-in vehicle if that’s part of the deal
- Any co-signer or other borrower that will be on the lease with you
The How-To: Steps To Lease a Car
Let’s get into it.
Do Your Research and Set a Budget
Do you know your credit score and where you stand on budget? Knowing what you can afford and what you want to spend will save you time and annoyance at the dealer. This is also the time to research the make model you want to lease. Take note of specials or deals that you may be eligible for, and arm yourself with as much information as you can before heading to the dealership.
Search Online And Find A Dealer
It’s true that most dealers want you to be on the lot, in person, but you’ll be able to get the first parts of the lease process completed online if you’re savvy. Find the dealership near you that has the vehicle you want to lease. Note any specials the dealer has and make sure you know of any new model years or updates that could help reduce the price of the model you’re looking at. Once you’ve selected a dealer and car, you can make initial contact online and try to hammer out as many details as possible from the comfort of your couch at home.
Work Out Terms
Once you’re at the dealership, you’ll need to nail down the exact terms and conditions that the lease will entail. This is where you’ll be working on rates, residual values, and mileage limitations, so it’s best to ask as many questions and to be as critical during this time as you’re able to be.
It’s an exciting day when your new car shows up. Enjoy it, but be sure you understand how much you can drive each year and what you’ll be on the hook for if anything goes wrong or if you exceed your mileage limits.
Maintain Your Car
Unlike buying a car, leasing requires that you limit the number of miles you drive each year and avoid making modifications or other changes that could impact the value of the car. The amount of money you pay each month for your lease is determined, in part, by how much the vehicle is expected to be worth at the end of the lease period. This means that the finance company is pretty strict on what it allows you to do with the car during a lease.
The Car Bibles Leasing Glossary
Welcome to Bible School!
A leased vehicle’s residual value is a measure of how much it will be worth at the end of the lease term. The lease monthly payment is determined, in part, by how much or little the car is expected to be worth.
As the name suggests, early termination is when the person leasing the vehicle decides to end the lease before the designated lease time period has passed. There may be fees or other charges related to the termination.
Beyond standard collision insurance, your finance company may require you to hold gap insurance, which is coverage to pay the difference between the actual value of a vehicle and the financed amount on the vehicle. Finance companies sometimes require this to protect themselves from a buyer who can’t pay off the value of a vehicle if it’s involved in an accident.
The mileage allowance is the maximum number of miles that can be driven in a leased vehicle before any overages or penalties come into play. This is usually a number that can be negotiated or updated to meet the buyer’s needs, but higher mileage allowances almost always cost more.
Car Bibles answers all your burning questions!
Q: Do I Need Insurance To Lease a Car?
A: Yes, leased vehicles carry the same insurance requirements that financed vehicles do. You might even want to carry higher coverage on your leased vehicle to avoid financial responsibility.
Q: Is It Possible To Get Discounts On Leases?
A: Absolutely, but the timing and details of each discount will vary depending on the make, model, and dealership. You may even qualify for discounts if you’ve owned other vehicles from the same dealership or automaker, or if you have recent military service, so it’s worth exploring all of your options.
Q: Is Leasing a Car Worth It?
A: Define “worth it.” If you don’t drive all that much and want to have the latest and greatest, leasing can be a great way to cycle through cars often without having to buy and sell each one. On the other hand, if you have a massive commute every day and choose to drive your cars into the ground instead of trading up every few years, buying might be your best choice.
Video Tutorial on Leasing A Car
What Do I Need After I Lease a Car?
Leasing a car can be stressful, but the reward is a new car. That’s why Car Bibles’ editors have selected a few products to help you out after you’ve leased a new ride. They include a Car Registration Holder, the BlueDriver OBD2 Scanner, and Meguiar’s Car Wash.
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