In today’s busy world, we rely on our transportation method in order to fulfill our daily responsibilities. As our vehicles age, mechanical problems can arise, and it soon becomes necessary to buy a new one. A great way to get out of this perpetual cycle is to consider leasing. Lease payments cover depreciation and taxes, and this can mean a lower monthly payment for a vehicle you can rely on. There are some things to understand to ensure you can make the most out of the leasing experience.
Understanding the Process
Prior to leasing a car, it’s important to understand just what the process consists of. To put it in layman’s terms, leasing is like renting. You will essentially be paying for the expected depreciation of the vehicle during the length of the lease. Unlike renting a house, however, the person leasing the vehicle is responsible for any maintenance that may be required. The term of most leases is 36 months or 36,000 miles. More people are beginning to find the advantages of leasing to be preferable to those enjoyed through buying.
Who Are You Leasing From
Most people assume that they are leasing from the dealership. In reality, most dealerships actually hire the services of car leasing companies, banks, and credit unions. Basically, the dealership normally acts as the liason between the leaser and the leasing company, and they add an additional charge for their service in doing so. While there are always bad apples in every barrel, it is possible to get a good deal leasing through the dealership. The trick is to read the contract carefully. While fine print may be daunting to mull over, it is worth the time.
Leasing Directly Through a Leasing Organization
Those leasing also have the option to set up the agreement directly through the leasing company, bank, or credit union. There is normally no negotiation as these organizations typically have a set contract based on the type of vehicle being leased. The advantage is that there is less to worry about regarding hidden fees and charges. The best advice regarding choosing this option is to take advantage of the competition. The more quotes you have in your arsenal, the better deal you will be able to get.
Taking the Confusion Out of the Monthly Payment
There are a variety of factors taken into consideration when it comes to the monthly payment on a lease, and it’s important to understand them so you know you are getting the best deal. There is a basic formula used to calculate the amount, and it is the depreciation value of the vehicle along with interest and taxes. This amount is divided by the total number of months of the lease. It is important to understand this concept, because car dealer and leasing establishments have no legal binding requiring them to disclose how the monthly payment is calculated. This knowledge gives the consumer the upper hand when shopping for the best deal.