What Do You Need to Know Before Leasing a Vehicle?
When you want to get behind the wheel of a new vehicle, you may find yourself contemplating whether you should opt for auto financing or leasing. Both options have their pros and cons, and one may be better suited to you depending on your personal needs and preferences. If you’re considering leasing a car, check out this helpful guide to learn more about the process before taking the plunge.
How Does Leasing a Vehicle Work?
Essentially, leasing a vehicle means renting a brand-new car long term, typically for two to four years. You have to pay an upfront fee and fixed monthly payments and then return the vehicle to the lessor when your lease is up. Usually, you’re allowed to purchase the car at the end of the lease if you choose to do so.
Before you sign a car lease, you’ll be asked to determine the number of miles you plan to drive each year. If you exceed the annual mileage limit, you’ll have to pay additional charges. You also have to return the car in good condition or a penalty may apply.
What Are the Benefits of Leasing a Vehicle?
Although it doesn’t lead to vehicle ownership, car leasing has become an increasingly popular option among car shoppers. After all, it’s the easiest way to get behind the wheel of a brand-new vehicle. Below are a few reasons why you should consider leasing a vehicle:
More Affordable Monthly Payments
When you lease a vehicle, you’ll generally enjoy significantly lower monthly payments than if you opt for financing. With auto financing, you have to pay the full purchase price of a vehicle plus interest. Lease payments, on the other hand, cover only the car’s depreciation over the lease term. As such, you can expect to save substantially each month if you lease a car rather than financing one.
Less Cash Required Upfront
If you decide to purchase a vehicle, the down payment you need to make can be as much as 20% of the purchase price. In contrast, a lease usually requires little to nothing upfront. Typically, you only have to make the first monthly payment and pay the tax, registration, and title fees.
Lower Repair Costs
Since a car lease usually lasts three years or less, you’ll most likely have factory bumper-to-bumper warranty coverage throughout the duration of your lease. Sometimes, the manufacturer will also provide complimentary maintenance. Carefully read your lease contract to find out exactly which maintenance and repair procedures are covered so that you can avoid unexpected service bills.
Opportunity To Drive a Different Vehicle Every Few Years
Another advantage of leasing is that it allows you to drive a different new vehicle every few years. This means you’ll have access to the most advanced automotive technologies, including the latest infotainment and safety features.
How To Lease a Vehicle
If you’re planning on leasing a vehicle, it’s essential that you know how the process works beforehand so that you can avoid unnecessary costs and hassles. Follow these steps to ensure a smooth leasing experience:
Choose a Vehicle
The first thing you need to do is to choose the right vehicle to lease. To do so, you have to take your budget and driving needs into consideration. For example, if you need to commute around Auburn, it’s a good idea to get a small vehicle that’s easy to drive, such as a sedan, hatchback, or crossover. If you need to ferry around your family, then an SUV is a better option, as it provides more passenger and cargo space. Consider getting a pickup truck if you regularly need to tow or haul heavy loads.
Configure Your Deal
When you lease a vehicle, you usually have three terms to choose from: 24, 36, or 48 months. The shorter your lease term, the more you’ll pay every month. Additionally, you’ll have to choose an annual mileage limit, which can range from 8,000 to 30,000 miles. Although a lower limit reduces your monthly payments, you should still opt for something that accurately reflects your driving needs. This is an important decision, as you’ll be subject to excess mileage charges if you go beyond the limit.
Generally, an initial payment is a necessary part of a lease deal. The amount is often a multiple of your monthly payment, which can be a one-, three-, six-, or nine-month option. It goes against the total cost of your leasing contract, so a larger upfront payment will result in lower monthly payments.
Stay on Track With Your Monthly Payments
Since a car lease is essentially a credit agreement, it’s important that you make your monthly payments on time. Otherwise, you may be penalized for late or missed payments, which can negatively impact your credit score. Also, note that your leased vehicle may be repossessed if you miss too many payments. If you’re unable to meet your monthly obligations for whatever reason, you should contact your lessor. They may provide you with an alternative solution, such as a contract transfer, early termination, or temporary monthly payment freeze.
Return the Leased Vehicle in Good Condition
When your lease is nearing its end, your lessor will contact you to schedule a date and time for their inspection agent to collect your leased vehicle. Once the appointment is set, make sure you thoroughly inspect the vehicle for any damage or problems, and get any issues fixed before the collection date. This can help you avoid paying excess damage penalties.
If you’re interested in leasing a vehicle in Auburn, Alabama, come to Hyundai of Auburn to check out our fantastic selection of new Hyundais. Serving Auburn, Woodland, Opelika, Tuskegee, Notasulga, and Waverly, our dealership carries all the vehicles in the latest Hyundai lineup, including popular models such as the Sonata, Kona, IONIQ 5, Tucson, Santa Fe, and Palisade. Also, we have awesome lease specials that you can use to save money on your car lease. Feel free to contact us if you have any questions or want to schedule a test drive.
2021 Hyundai Ioniq 5 Project 45 by Rutger van der Maar is licensed with CC BY 2.0
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