For many car buyers, leasing is a fantastic option. Leasing a car:
- gives you the opportunity to drive a better car for less money
- greatly reduces or eliminates down payments
- lowers repair costs because the vehicle is still covered under the factory warranty
- and, after a few years of ownership, you can easily transition to another new top of the line vehicle.
Despite these benefits, many potential buyers are intimidated by the details of a lease, and don’t understand exactly how they work. While leasing a car involves a lot of jargon, it’s rather simple once you wrap your head around the basic idea. In no time, you could be driving a car with the best features currently available to consumers without doing serious damage to your bank account.
How Leasing Works
Here’s a pared down and simplified version of how leasing works: say you sign a lease agreement at an Audi dealer near Fort Worth. You’re agreeing to temporarily take ownership of a car for a certain amount of time—usually somewhere between one year and five years—and during that time you’re agreeing to pay monthly fees until the term expires. When the lease is up, you return the car.
That’s the basic idea, but even with this clear idea in mind things can get a little tricky when you’re in negotiations at the dealership. As with any significant purchase, there are best practices you should adhere to in order to get the best deal possible.
Before you can take off on a family vacation in the 2018 RV you’ve been eyeing, you need to do some research. With a certain car in mind, you should contact several dealers and ask for the sales price of the vehicle. It’s important to remember that discrepancies in price can be attributed to upgraded features, and if that’s something you’re interested in you should make a note of which dealership carried the most ideal car.
Call In and Evaluate
Once you’ve found the car with the best sales price, call back and ask for the salesperson that gave you the quote. Tell them that you’re interested in leasing the vehicle at that sales price. Consider how long you’d like to lease the vehicle (a 24-month contract is considered a short lease, and long leases range anywhere between three and five years) and then you and the salesperson will set the terms of the lease. If the down payment is larger than you expected, know that that only means the monthly tab will be lower.
Once you’ve leased the car, there are certain things you need to keep in mind, the first being that you don’t own the vehicle. In effect you’re renting it, and when the lease expires you’re going to have to return it in similar condition to when you picked it up. A standard element of most leases is that you’re expected to keep the car under a certain amount of miles in a given year, and if you exceed that number the penalties can be significant. That means really long car trips should either be held to a minimum or avoided, especially if your leased vehicle is going to be your daily driver.
You can also be penalized if you fail to keep the exterior or interior of the car in good condition. If you decide to return the car before the lease expires they can also charge you a fee for abandoning the contract.
Leasing is a Great Option
However, leasing is still the best option for people who don’t have the funds to buy a car outright, or who would rather be frugal with their money. If you don’t think you’re going to exceed the mileage limit as stipulated in the contract (which is usually somewhere around or below 15,000 miles per year), and if you’re interested in continuing to drive the best cars available to consumers at a reasonable cost, then there’s no reason you shouldn’t seriously consider this option.
If you want to find the safest possible car to lease, try searching for your preferred vehicles on the IIHS government website, which ranks cars based on their ability to withstand and avoided collisions.