Not everyone who decides to lease a new car has to be a leasing expert. A lot of us do not know the ins and outs of car leasing. If you do not ask the right questions before you lease a car, you might end up with a bad deal. Are you confused about how to go about the whole leasing process? Then this article will help you in asking the right kind of questions before you make a big commitment. These five questions will help you in the right direction of finding the best possible deal for yourself.
- Are there any lease deals going on?
Most carmakers keep offering discounted deals periodically to boost their sales. These sales could help you save a substantial amount. However, you must check the fine print of the lease ad to check if there are any hidden or additional expenses. The monthly payment amount that they quote will usually not include the sales tax or registration fee. These lease offers are often only available to current leaseholders.
- What is the car’s residual value?
A residual value of a car is an estimate of the value of the vehicle after the lease ends. It is an essential component of a good lease. The higher the residual value is, the lower your lease payment will be. When you lease a car, you are paying for the difference between the selling price and the residual amount, after the course of the lease. If the residual amount is high, then the difference would be small. Always ask dealers for the residual price of the car you are considering. They will give you a percentage of 45 to 60 percent.
- How many miles does the lease include?
Sometimes you may read about a great deal that is offered, but if you look closer, you will find out that the lease only includes 6,500 or 10,000 miles a year. Limited miles may be suitable for those who do not have to drive much or travel. However, most people would need a minimum of 12,000 miles a year. Some might even require more. Before you commit to a lease, make sure that you have enough miles to last you a year. The lower mileage leases can get changed to allow more miles; however, it would mean an increase in the monthly charges.
- How much money is due upfront?
You should always ask this question if you see an ad on a television or a newspaper that offers a low monthly lease payment. Most often, these ads of low monthly payment trap you with a very high up-front payment requirement. The drive-off fee is a combination of fee and down payment. If you give a higher down payment, it would mean that you will have to pay a lesser monthly fee. It is exactly like a traditional loan. In an ideal situation, one would want to pay as little as possible upfront. Unlike a traditional loan, it is not necessary that giving out a big chunk of cash would save you a lot of money in the long run. It might be a source of loss for you. If your leased vehicle gets stolen, there is no guarantee that the down payment that you have made will get returned to your insurance settlement. Those people who are pros at car leasing often just choose to pay the first month’s payment and registration fee to begin the lease. All the other charges get added to the monthly payment. Since the money saved in up-front costs is spread out over the length of the lease, the monthly payment increases. However, the overall total cost of the lease would remain the same.
- What will the vehicle cost me over e life of the lease?
If you multiply the total amount of your potential monthly payment, including taxes and fees by the number of months in your lease, and add the answer to your total drive-off cost, the total would be the complete amount you will spend on the lease. While the advantage of leasing is a low monthly payment, most people will never enjoy the ownership of the vehicle unless they buy the lease out at the end of the term. The question is, are you willing to pay a substantial amount for something that you most likely will give back in three years? If your answer is no, you might want to look at other vehicles to lease.
When you get answers to these questions, you will get a much clearer picture of the value of the lease that you are considering. These questions will also show the dealer that you have done your research and have a grasp of the essential elements of the lease. Ponder on the answers carefully, and it will help you get a lease that will save you money and provide an enjoyable driving experience.