What is Car Leasing - Frequently Asked Auto Lease Questions
How Does Vehicle Leasing Work? What is Car Leasing?
Are you looking for answers about what is car leasing? or how does leasing work, then you're in good company. Not everyone is familiar with all the pros and cons of leasing a car. In fact, there are more than a few auto leasing options available these days.
In the most basic terms, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed period of time. Many car and truck dealers offer vehicle leasing as an another option to traditional auto financing or purchase. It is commonly utilized by companies when acquiring business vehicles. In general, leasing a car costs less than buying, although there are several restrictions, such as vehicle mileage limits and non-customization agreements, that can determine whether it is better to lease or buy a car.
Let's examine our ten most frequently asked questions regarding auto leasing.
1) Is It Better to Lease or Buy a Car?
Deciding whether to lease or buy depends on many factors. If you drive a lot of miles annual and like to keep your vehicles for longer than three years, leasing won't be very beneficial for you. However, if you look forward to getting a new car, truck, or SUV every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Essentially, the difference between auto leasing or buying really comes down to your financial, automotive, and personal priorities.
Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it's already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.
2) Car Leasing - Is It a Good Idea?
There are many benefits of leasing a car that you just can't get with other auto financing offers. These benefits include lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. Foreven more details on the benefits of car leasing, our auto finance department is on hand to answer all of your questions.
3) Is There Such a Thing as Used Car Leasing?
Yes, you actually can lease a used car. This type of 'used car leasing' is a little known 'secret' among auto dealership but most dealerships do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with fewer than 48,000 miles.
How Much Does It Cost to Lease a Car?
Many manufacturers and dealerships offer zero-down lease deals. Of course, there are varying factors that qualify or disqualify individuals from these kinds of leases. Factors such as credit payment history, credit scores, etc. Just don't forget that paying zero down typically means bigger monthly payments. Vehicle leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
5) Do You Get Your Deposit Back On Car Leasing?
Typically a lease deposit is refundable at the termination of the lease. At least this is true when all leasing contract requirements have been met. Keep in mind that a deposit (a.k.a. a security deposit) is not the same thing as a down payment. Down payments are not refundable but security deposits typically are. Also note that some leases require non-refundable deposits. Therefore, read your lease agreement diligently and ask questions before you sign on the dotted line.
6) Can One Buy the Lease Vehicle?
The majority of auto lease contracts have buy-out clauses in them in the event that you fall in love with your vehicle and would like to purchase it. Please note that the purchase price of the vehicle may vary. This depends on the vehicle's residual value after the lease agreement has expired. There are options to purchase your leased vehicle prior to the completion of the contract. For this, however, you will need to speak with a leasing representative. Only they can provide these buy-out details and take care of any early termination fees that may apply.
7) What Kind Of Credit Score Do You Need To Lease A Car?
Generally speaking, credit score of 619 or lower is classified as "subprime". While a subprime borrower won't typically be automatically declined, a 619 or lower credit score means you will typically have to pay a higher interest rate and/or down payment. There are many steps you can take to improve your credit score such as making on-time payments, consistent employment history, and applying for loans too many times.
8) Is It Possible to Lease a Car with Bad Credit & 0 Down?
While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don't worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team.
9) May I Return My Lease Vehicle to a Different Dealership?
Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It's probably obvious, but you can't turn a leased car into any other brand of dealership. You can, however, turn your leased Buick GMC into any authorized Buick GMC dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
10) Is Maintenance Included With My Car Lease?
Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Of course, specifics may vary within specific lease contracts, but most leases will cover normal wear-and-tear service and maintenance needs for your leased vehicle. These include filter and fluid changes, regular tune-ups, and regularly scheduled maintenance typically doesn't cost anything out of pocket.
Contact a Car Leasing Expert Today
If you have more questions about vehicle leasing, current promotions, or related topics, then contact us today. Our team of highly knowledgeable car leasing agents are standing by to respond to all your questions.
10 Auto Lease Questions to Ask Your Dealer - Bob Howard Buick GMC