When it comes to car-financing, you would see two kinds of people. Those who are into car leasing and have leased cars. And those who have never tried it in their lives. And it is common for those who have never tried it to believe all the false notions and myths that surround car leasing.
Car leasing has popularly grown over the years, but some people are still dubious regarding it. If you see the automobile forums on the internet, you will notice how the same myths and misconceptions come up repeatedly stated as facts. Today, we are going to discuss some of the most common car leasing myths and bust them.
- Car leasing is not a good deal for customers
Sure, car leasing may not be suitable for everyone. But it can be a great deal who can afford a car lease. Car leases usually have lower monthly payments compared to financing as you pay for using the vehicle only. Also, most of the car lease for new cars that are between 24 to 36 months usually. Auto loans last much longer than, for about 60 to 72 months.
- There is no such thing as a bad credit car lease
Bad credit leasing exists, but your financial situation could make it difficult for you to qualify for the lease. Some people work with people who don’t have perfect credit, but it is not easy finding one. And if you decide to lease, you should take many things into account. You may not want to give it a try when your credit score is less than perfect.
Leasing may not be a good option for people with average or below-average credit due to the short-term nature of the process. Also, if you are making efforts to boost your credit score, you do not have enough time on your hands to build a solid payment history as you can in an auto loan. So, chances are that it might not boost as much by the time the lease ends.
- There is no room for negotiation
There is no truth in this. There are many things that you can negotiate easily on a vehicle lease. Let’s go through a few of them:
- The amount you pay for
financing the car lease is called capitalized cost. And you can negotiate it to
suit your budget. The cap cost includes the price of the car, including fees,
taxes, and additional equipment.
- The dealership charges documentation fees for processing and filing of the lease paperwork. Some states have a limit on how much dealerships can charge while some don’t. Try to negotiate and bring it as low as possible.
- There is the money factor
as well. It is comparable to the interest rate on an auto loan. And although
you cannot get it any lower, with poor credit, you can try.
- There is a mileage limit
for all leased cars. You have to pay an additional fee for exceeding the
mileage limit. First, determine how much you drive on average, so you can get
the appropriate amount of miles incorporated in the lease, so you pay the lower
- If you are trading in a car
to apply for a lease, you can negotiate how much you get for it. It is called a
cap cost reduction, basically a down payment on the car lease. It acts as a
pre-payment of the car lease so you can lower the monthly payment.
- Excessive fees when the lease ends
It is not a myth but more of a misconception. There used to be open-ended leases previously. The car leases nowadays are closed-end by law. This way, you are going to be charged for extra mileage or any damage to the vehicle. Normal-sized dents and scratches are acceptable. Usually, most of the car leases come with 12,000 miles per year. And anything over that is going to charge you .10 to .25 per mile fee.
Mileage is the first thing that you should consider if you are contemplating the idea of a car lease. If you know that your annual mileage is going to be more than 12,000 mileage, leasing may not be for you. And in case your car mileage is over 12,000 but below 15,000, go for a 15,000-mile lease that would mean bit expensive payments, but it will be worth your while.
Also, you should know that just because you are leasing a car, it does not mean that you cannot negotiate for trade-in. If you are worried about excess damage or are over mileage, you should negotiate with the dealer for something new, allowing them to pay off the lease to the bank before the expiration of the car lease. Contrary to an auto loan, the risk for damage, wear and tear is not much with a car lease. It depreciates the car.
- Leases are expensive
Some are of the idea that leases are outrageously expensive. But this was not always the case. If you have excessive wear and tear or damage on the leased car or you are over your mileage limit, you can assess the fees at lease turn-in. These fees can add up quite rapidly, but you don’t have to pay it if you calculate your required miles at the start of the lease and take good care of the car.
There is no denying the fact that that leasing may not be for everyone. And if you drive more than 15,000 annually, or have an inclination towards owning and fixing old cars, then going for a car lease every 2 to 4 years is not wise.
But if you enjoy and value new cars and keep your mileage within the limit, but lack the skills to maintain old vehicles, then don’t pay heed to the rumors and myths you come across regarding car leasing. You don’t have to be an expert to make a sound deal on a car lease. Now you know that most of the car leasing myths are plain untrue. And now that you know the reality, you could certainly think about car leasing. And if you want to get a car on lease quickly, you know where to go. Quitalease would help you find one!