The debate between buying and leasing a car is never ending. There are fair arguments for both, but there are few ways to get the latest model car unless you decide to lease.
Leasing a car is the perfect solution for many people who just don’t see the value in car ownership. Here’s a car leasing guide to help you navigate the process once you’re ready to get started.
Getting Started with Leasing
Car leasing isn’t an option for everyone. It’s important you prepare both your finances and credit before getting involved with a lease.
You’ll get the best deals and lowest payments if you choose to lease your car with good credit. Interest rates can mean the difference between hundreds of dollars a month in car payments.
Boost your credit score quickly by paying down debt on credit cards and making on-time payments. These both account for more than 60 percent of your credit score.
Avoiding closing any accounts while you’re working on your credit. If you can get your credit above a 750, you’ll have to most opportunities to get the car of your dreams at a fraction of the cost.
Where to Look for Leases
The next step to the leasing process is finding the car you want. Many people look to lease cars they couldn’t afford to buy in cash.
Start at the best car dealership in your area with a wide assortment of new cars. This isn’t a requirement, but it’s definitely a good place to start if you’re in the market for a luxury vehicle.
Look for cars with low expenses like low gas mileage, dependability, and inexpensive insurance plans. Expect to pay a significantly less insurance premium for a new car rather than a used car.
Start by making a list of cars in your price range and desired features. Schedule appointments with local dealerships so you’re not blindsided by distractions when you visit the lot.
Salesman can be adamant about alternative deals and offer especially if there’s a bonus in it for them. Be clear about your budget range and the make and model car you’re looking for.
What Kind of Lease Can I Get?
Lease terms vary based on the kind of deal you want. Negotiate the purchase price of the car. This sounds counterintuitive for a lease but you need to know this in order to make sure it works for your budget.
Your monthly car payments are based on this purchase price. Discuss this before locking yourself into any deals with the salesman.
You can research this amount before heading to the dealership if you’re very sure about what kind of car you want. Check Consumer Reports to learn how much the dealer pays for a certain kind of car.
There’s a small fee to check, but this is the difference in thousands of dollars in payments. Knowing ahead of time can spare you embarrassment of having to switch gears because there’s no room to negotiate.
Only work with dealers that carry top of the line models like Alejandro Tabosky Group so you have a decent amount of options to choose from.
Make a Down Payment
It’s a good idea to put some money down on the car you plan to lease. This might not make sense if the reason you’re leasing is to avoid too much overhead.
But it’s a good rule of thumb if you really need monthly payments. People with inconsistent income are good candidates for this.
Lump sums of money allow you the flexibility to put down a large amount at once, but when you’re waiting for your next paycheck, the low payments help you avoid getting overwhelmed. In general, down payments reduce your overall financial liability with both a lease and a purchase.
Keep in mind that if you choose to skip a down payment there are bigger penalties on late lease payments than on regular payments. Because you don’t own the car and never will, there’s a heftier late fee for falling behind.
The same goes for breaking your lease early. If there’s any chance you won’t want the vehicle for the full lease term, you’ll pay expensive fees to get rid of the car since it’s considered a breach of contract.
When to Just Buy a Car
There are times when buying a car just makes more sense. For example, if you have access to the cash to skip financing, get a used car instead of a lease.
The same applies if you’re not that interested in having the latest model. A lease is valuable because it gives you access to cars just outside their reach.
If you’re indifferent to car models, it makes no sense to miss out on the equity you receive from buying a car. Lease payments are slightly less than financing on a loan but at the end of the lease term you have nothing to show for your payments.
Car Leasing Guide for Success
This car leasing guide is just a start for finding the perfect deal on a vehicle. You’ll need to check local inventory to make sure there are even viable options for you and your family.
Dealerships might have great promotions in place to help you get into a car for far less than you expected. Stay flexible in the features you want so you aren’t limiting your options.
Getting cars shipped from other regions is an option, but it comes at a cost. For more information and tips, visit our blog for updates