We have covered pretty much what happens during a car deal. But what happens next? How do things unfold once you have signed the car dealership? For starters, whatever queries and concerns you may now have are going to be directed to the finance company from now onwards, not the dealer.
So, here are a few things you need to bear in mind after signing the car lease agreement.
Deals Are Not Signed on Trial
You should know that there is no grace period or a return policy once you have signed your contract. A deal is a deal, and you cannot cancel it no matter if you are the buyer or the seller. A contract is legal and binding. But if you have reason to believe that there have been few errors of omission or some other mistake, contact the dealer and your leasing company right away.
If you have to end your car lease, it’s better to wait. Because it is going to be very expensive to terminate a car lease early.
How about moving your car?
If you plan to move during the time of your car lease, know that various car lease contracts prevent you from doing that. Most of the car lease agreements restrict you from moving your cars out of the country. Make sure that you read the fine print in your contract.
If you move to another state along with your vehicle, it is not a major issue. But, it could impact your payments and could increase or decrease them due to the different sales tax rates between the two states. It is essential to inform your lease company when you move so they can make the required adjustments.
In case of an accident
You should inform your lease and insurance company in case of loss or theft. If the damages occurred are repairable, your insurance will cover it after subtracting your deductible. See that you get the repairs from a reputable shop, which does quality work and also uses OEM parts. Or else you would have to pay for the repairs when you return your vehicle after the lease term ends.
If your car was stolen or totaled, the insurance company will pay for the damages to the lease company for the vehicle after cutting the deductible that you are going to pay. Know that the insurance is only going to cover the current value of the vehicle, not the sum you own on your lease, which could be more.
Unless you have GAP insurance or you are allowed some slack from the lease contract, you would have to pay the difference, which could be a large amount. Most of the modern car lease agreements come with a waiver clause that lets you off easy. But check first to be sure.
Some states also offer diminished value laws that entail auto insurance companies to compensate the vehicle owners for lower resale value due to accidents even after repairs. This payment has to go to the lease company, but if you want to purchase the vehicle when the lease ends, you will get the credit. Contact your lease to find out how they handle this situation.
Insurance information about your leased car
It is a prerequisite of car lease contracts that you carry insurance on the leased vehicle. And naming the company as an additional insured. The level of coverage could generally be a bit more than you would usually carry on a vehicle you own.
If you fail to carry the specified amount of coverage, it violates your contract. Here is an approximate amount of coverage:
- In case of bodily injury, not less than $100,000/$300,000 (single/multiple people)
- In case of combined bodily Injury/property damage, not less than $500,000 per accident
- For deductibles, no more than $1000 for collision and no more than $1000 for comprehensive
- For property damage – not less than $50,000
As leasing requires more amount than your average amount of coverage, do some research on insurance companies for the best rates. The best way to do get free rate quotas is from the provider’s websites directly.
Keep an eye on that mileage
When you get a car on a lease, take care of your mileage. See that you don’t end up exceeding your limit by the time your lease term ends. Say you have an annual limit of 12000 miles, in that case, you should not be driving more than 1000 miles per month, which amounts to a total of 36000 miles for a lease of 3 years.
If you think that you are driving too many miles, then try to cut back, and bring it in line with the allowed limit. Or you will have to pay for the excess miles when your lease ends. An easy way to do so is swapping your car with someone who does not drive much, or you can even rent a vehicle if you are planning for a road trip. If you think you won’t be successful in staying within your mileage limits, know that automobile miles do not come for free, no matter if you are buying, leasing, or renting.
Canceling your car lease only because of exceeding the mileage limit is not wise. It is going to be very expensive, and you would still pay for the miles you are going to drive in any new vehicle. So, come in terms with the fact that you have to pay for exceeding the mileage limit. So, it is better that you begin to put money aside for this. But, if you end up buying the leased vehicle at the end of the lease term, you can avoid the mileage fees.
Hold Up Your Part of the Agreement
It is your responsibility that you maintain your vehicle, carry the specified amount of insurance and see that you are regular in making the payments as per the lease agreement. Pay the taxes as per government requirement.
Avoid making any changes and modifications to your vehicles and repair any damages/fines/fees that might occur. Do not allow any unlicensed drivers to drive your car and do not drive while you are drunk. If you fail to do so, it could violate the lease contract. You don’t have to get your car’s maintenance by a dealer, but see that a professional does the job. Keep records for any need in the future.
If bad luck strikes
If you were unlucky to get a vehicle that has technical issues that just keep coming, know that lease contracts do not provide for the return of the vehicle and getting you your money. This is classified as a lemon. Most of the states have established laws for such scenarios to apply on leased vehicles along with purchased vehicles.
Car leasing is a hassle-free and cost-effective means of getting your set of wheels for most. Most people want to go for car leasing for their next car. Many car leasing customers of today have been doing it for many years.
Those who came across issues with leasing are usually those who fail to grasp the concept of leasing and its works or were just not the right candidates like, driving too many miles per year. It is only for the car leasing failed to come off as a viable option. Otherwise, car leasing is a preferred means to get a vehicle for the majority of people.