So you are out for leasing and ready to finalize the deal you had at your local dealership but wait! Did the dealer reveal the intricate details of your leasing contract? Perhaps, no. There are many things about your lease contract that are not known to you and dealers usually don’t reveal it. Here are 10 new things that you need to know before signing above the dotted line.

Better credit would find you the better lease

Getting a loan may be easier than getting a good lease deal if you don’t have a good credit score. Though it may sound like it should be the opposite, getting a good deal on a lease generally requires excellent credit history. Credit scores can range from 300- 800. Anything above 700 is considered to be a good score. No matter how terrible your score is, you will find someone willing to lease you a car, but the rate they offer may not be worth it after all.

It is hard to get a loan

Credit for leases is hard to come by. Most of the banks, credit unions, and other finance sources don’t offer credit facility for leasing. In this situation, the average lease customer is restricted to using captive financing like Toyota Financial Services or GM Financial. But this type of financing is not flexible and customer has to accept at whatever rate that lender is willing to provide. That’s not a problem for those who have good credit history and who are eligible for sub-vented financing. But people with lower credit scores may find much better interest rates on a purchase loan rather than on lease.

Leasing is more economical upfront

Leasing, as every lease buyer may know by now, typically offers a lower monthly payment as compared to buying a car. The payments differ even for the same car. A better credit history means that you may not have to pay anything down as security or part of the deal. Lease gives you the freedom to drive a new car that otherwise would have been impossible.

Trade in for a new model without nuisance

If you are one of those crazy freaks that want to upgrade the iPhone the minute a new one comes out, then you will relish leasing a car. It’s easy to drive a new car by trading in your previous model. At the end of your lease, you can walk into the dealership, drop off the keys and pick up the new car that day. You do not have to go through the hassle of going through selling the car or bearing the financial hits in the form of depreciation.

Your car repairs are taken care of

Most of the leased vehicles are covered by the official warranty. Lease periods usually lasts for three years on average. Your leased vehicle will be under warranty that sometimes include basic maintenance. So your only costs are insurance and fuel. But even then always take care of your leased vehicle and perform periodic check-ups so that you return the vehicle in optimum condition.

You are restricted by the miles limit

If you drive frequently to the clients, you have a long commute to work, or you are a weekend traveler, then be informed that a lease puts a cap on yearly mileage. Some lease contracts even restrict you to the state you live. This may not be the best fit. Nearly all of the lease contracts are bound by mileage restrictions. They are usually between 12,000-15,000 miles a year. Driving over this limit will lead to steep excess mileage charges. They are deducted at the end of your lease. So if you are a frequent traveler then buying might be the better option for you.

You can’t do a side business

If you are thinking about using your leased vehicle for using as a side business to ear a bit of extra money then check your contract. Some contracts do not allow the customers to use the leased car for ride-sharing apps like Uber and Lyft. Secondly, using your ride for any such money making activity means you are burning your allowed miles. It also means fewer miles for your own personal use. It would be better you buy the car in case you need it for a side business.

Car lease is more like a long-term rental

Owning a car means having an asset. You have an equity in it even if it is a depreciating asset. After you have paid off your loan, you will have some equity in it. However, at the end of the lease, there is no cash or value you can use to put towards another car. You may even owe money to the dealership if the vehicle is damaged or due to excess mileage.

Plan an exit-strategy

You will have two obvious options at the end of the lease. You can either hand over the car to the dealer and lease a new one, or buy the same car for residual amount which is called a lease buyout. If you want to keep the car, then paying the residual amount of the vehicle is the only way. However, some lease contracts offer an early buyout which allow you to buy the leased vehicle before your lease contract expires. There are also some early termination fees if you want to get out of the contract early. If by any chance you want to get out of the lease early, the safest way would be to transfer your lease through Quitalease by finding a potential lease buyer. In this way, you may not have to pay associated fees.

For the long run, own the car

Purchasing a car in cash means you own the car outright. If the car is financed, the lending agency owns the vehicle but only until the loan is paid off. However, when you lease a car, the leasing company owns the vehicle always. Leasing may save you money on monthly payments, but the money you spend is not going towards ownership. When you own the car, you do not have to pay anything unlike leasing. So if you are looking to drive a car for a longer period and you have no qualms over driving a car for six years or so then buying would make sense as it would save you thousands of dollars that you would otherwise have to pay as monthly installments in a car lease.