INTRODUCTION ON HOW TO LEASE A CAR
Leasing a car is very different from buying a car. When you buy a car, the car becomes yours totally, but when you lease a car, you are allowed to own the car for a particular amount of time, which could be weeks or months. In some cases, you may be allowed to purchase the car to become yours after leasing.
What is leasing?
Leasing is a contract that spells out the terms under which one party agrees to rent an asset—in this situation, a car—from another party. It ensures that the lessee has access to the vehicle while simultaneously ensuring that the lessor (the owner of the property or renter) receives monthly payments for a certain length of time.
Suppose you feel like you can’t personally own your car now because of reasons you have in mind and want to start leasing a car. Here are various steps you have to consider to lease a car. These steps will be considered carefully in the list below.
STEPS TO FOLLOW WHEN LEASING A CAR
Carry out proper research
If you are going to know how to lease a car, the first step you should take is to conduct proper research. You must know that leasing a car comes with many terms and conditions that need to be met. If you think you are capable, then you can go on ahead. One of the things to consider in your research is what best car model suits you. For example, the car should be something that is within your budget. The terms and conditions of leasing a car are quite different from buying, so make sure you carry out proper research to know them.
Know the terms used in leasing
Being acquitted with terms used in leasing should be a part of what you need to know. Knowing these terms will help you understand words you might be unfamiliar with. Below are some terms that you should know:
Residual value
Your monthly payment will be determined by residual value. A larger residual value indicates that the lessor forecasts less depreciation throughout your lease, implying that the car will hold its worth better.
MSRP
Simply put, the manufacturer’s suggested retail price is abbreviated as MSRP.
Deposition fee
You may be required to pay a lease disposition charge if you return the vehicle at the end of your lease. This fee assists the lessor in preparing to market the vehicle and can cover costs such as vehicle maintenance, storage costs, management fees, and more.
Lessor/Lessee
Lessor is the person that gives out the car, the person from which you lease the car. At the same time, the lessee is you, the person to who the car is being leased.
Choose a reasonable budget for yourself.
The next thing you need to consider is how much money you got. When leasing a car, you must have enough money that you will need to not just lease the car upfront, but you need to consider if it is something you can continually afford and be able to pay at the end of every month during your time of using the car. You should also consider if, after leasing the car, you can pay for any more responsibilities that may come up, like documents and more.
Choose your brand and model.
After looking at your budget, you now need to think of the brand and model you want to go for. Again, your budget should have helped you narrow down the model you want to choose.
Call and visit dealers.
Before heading straight to the dealer’s office, you might want to make a phone call concerning leasing a car, so you don’t waste time going to the dealer’s place and not finding what you want. When on a call with the dealer, you need to ask questions like;
Is the car you want available for lease?
How much will it cost?
You can know how long you want to lease it for and many other things over the phone. After confirming the information, you need on call, you can proceed to the dealer’s office and check out the vehicle upfront, and you can also ask to test drive the vehicle so you know what you want to get is in good condition.
Negotiate your terms
When you go to a dealership, you are not only chatting about the car’s price. During the leasing procedure, almost everything is up for discussion. You will only have one chance to get the incentives you want to have in the contract during the bargaining phase.
Make a comparison of offers you have gotten so far.
Pay much attention to the finer points of the transaction, not only the monthly cost. For example, which dealer offered the most decrease in capitalized cost versus MSRP? Did they compensate for this by increasing the money factor? Was indeed the residual value the same for every dealer? Did you receive quotes from certain dealers for ready payments that were higher than the initial payment plus registration fees? These are important questions you must ask when comparing offers from the different dealers you’ve managed to reach.
Pick the best deal
This simply entails picking the most favorable offer, and then you can proceed to lease the car of your choice.
Take care of the leased car.
Remember it is important for you to take good care of the car you selected. Keep in mind that any damage that may happen to it would only cost you extra.
If you must purchase protection for the car interior, do it. Long as you keep the car in cool shape till you want to return it.
Also, you must take it for maintenance. Sometimes, the agreement covers this, so you may not spend a lot of money on the leased car.
Keep to agreements
Make sure that you do when it is time for you to return the vehicle. Make sure that you do when it is time to send a payment for the month. Keep in mind that it is important that you follow the agreement you signed to avoid problems with the dealer or lessor.
If you read these steps from the beginning to this point, you already know how to lease a car.
FAQs
Should you buy or lease a car?
When you are finding it difficult to decide whether to buy or lease a car, you have to consider something to know what you should do. Some of these things include if you are willing to use your car for a long time if you are prepared for long-term maintenance of your vehicle, and if you are prepared to start paying taxes and fees ahead, then you should buy yourself a car. But if you are the opposite, you should try leasing a car.
Can I lease a brand new car?
Yes, you can. You should contact the dealer first to know what kind of cars he has up for lease. Some dealers only lease brand new cars, and others use cars, while some lease both. But know that you must contact the lessor to know if he has brand new cars up for lease.
What if I exceed the annual mileage?
Every leasing automobile contract includes a ‘surplus mileage’ pricing, which means that if you go above your agreed-upon total mileage, you will be fined at this rate.
Are there any benefits to leasing a car over buying one?
Yes, there are many benefits you can enjoy when you lease a car. Some of these benefits include the fact that you get to drive a new car within the stipulated number of lease periods at a more efficient price. Aside from that, you won’t have any problem selling the car when it goes out of fashion to you. You can simply return that car and lease a new one from the lessor.
What if I cannot find the exact model I want to lease?
If you may go for another model, as long as it is within your budget price, it won’t be a terrible idea if you go for it.
At what age can I lease a car?
You should be at lease from the age of 18 to lease a car, with the sufficient details you need to prove that you’re also working and capable of leasing the car of your choice.
What is the shortest and longest time I can lease a car?
The shortest time to lease a car is nine months, while the longest is three years.
CONCLUSION
Leasing a car comes with many benefits that you might not have enjoyed if you had bought one. Once you have finalized your agreement and signed the necessary documents, it is time for you to enjoy your car and the benefit that comes with it. Also, do not forget to take good care of your leased car and enjoy it till you feel you need to change it.
