The biggest advantage of car lease is you get to drive the car of your dreams without buying it. The offer does seem too good to be true however most people who go in for car leases forget to read the fine print of the leasing document. In fact, this is one mistake that you can do when you look for the right car lease for your individual needs.
Factors you should take into consideration for car leases
Omari Betts is a car leasing and sales consultant with ChevyChaseAcura and he says that car dealers generally advertise low lease payments every month on new vehicles. However, consumers are asked to pay a large down payment in the beginning of the car lease for getting low monthly payments. This money is used to pay a portion of the car lease in advance however prepaying can be an issue in case the car is stolen or damaged in the first few months he adds.
What happens when the car is stolen or damaged?
In case, the car is stolen or damaged, the insurance company will reimburse the leasing company the value of the vehicle however the money that you pay as upfront charges will not be refunded. This means that despite paying the upfront charges you will not have a car. He says that you should not pay over $2000 for the car in advance. In some cases, he says that you should not pay anything at all if possible. As if you pay a less amount in the beginning, the monthly payment will increase however, you can take the cash in prepayment and place it in an interest bearing account. You have the option to use that money to make lease payments every month and in case anything happens to the car at the end of the term, the leasing company will not have a large chunk of the money you paid.
The value of any new car drops after you drive it a lot- cars that are leased are no exception! In case, the car that is leased is stolen, the auto insurance company will make the payment for the car’s value. This sum does not cover the total obligation of the consumer under the terms of the lease. Unless you have gap insurance, you need to pay the balance out of your pocket. In the beginning of a car lease, consumers should ask if the contract covers the specialty gap insurance and in case it doesn’t the customer should look for a car with a lease plan that gives him or her this advantage.
Know your driving habits
Some car leasing companies will charge you when you go beyond the mileage limits. In order to avoid this extra fee, it is important for you to know what your driving habits are. The lease payment per month will increase with the increase in mileage.
Omari Betts says that you should take the above considerations into account when you are thinking about taking a car lease!