7 Things to Consider Before Leasing a New Car
If you prefer driving a new car every 2 to 3 years, leasing is probably the best option compared to purchasing. Here are 7 things to consider before leasing a car.
1. Lease Specials
In an effort to increase new car sales, manufacturers will often offer specials on new car leases at the start of every month. What vehicle make and model are you thinking of leasing? Lease offers will vary from one brand to the other. Always check what lease specials your local dealership is offering. Larry H. Miller Dealerships are always happy to connect you with the best lease deals. Inquire now>
2. Vehicle Cost
One of the questions you want to ask yourself when considering leasing a vehicle is, how much does the car cost? Since you will be making monthly payments every month for a few years, knowing the total amount you will pay for the life of the lease is very important. Cheaper vehicles will usually have lower monthly payments compared to expensive ones. Always pick a vehicle with affordable monthly payments to avoid late fees due to the money crunch.
3. Vehicle Residual Value
A vehicle residual value is the car’s value at the end of the lease. The residual value is also the amount you would pay for the car if you chose to buy it back at lease end. The manufacturer always provides residual value as a percentage. For example;
$50,000 MSRP, 3 Year Lease & 56% Residual Value
$50,000 MSRP * Residual value of 56% = $28,000 value after 3 years
Vehicles with a higher residual value will amount less depreciation cost. Hence a lower monthly payment, compared to vehicles with a lower residual value.
4. Amount Due at Signing
Every lease is made of a monthly payment, lease duration, amount due at signing and the allowable miles per year. You can get lease offers with zero down or be required to put a specified amount down when you sign the lease. Putting more money down means that your monthly payments will be lower, compared to zero down for the same vehicle offer. The big question you should ask yourself is, how much am I willing to pay when signing for the lease?
5. Lease Miles/Year
Every car lease will have stated allowable miles to be driven for the course of the contract. Most car leases are about 10,000 to 15,000 miles per year. Most manufacturers will tell you the cost per mile if you exceed the total miles allowed at lease end. Try to calculate the average driving distance per month and multiply by 12 to know if you will go over the lease miles per year according to your lease contract.
6. Fees & Taxes
Acquisition and disposition fees can always be negotiated at lease end. Many manufacturers will waive the disposition fee if you get another vehicle from them after turning in. The monthly payment advertised is usually before taxes, fees and registration costs. Always remember that taxes will be added to your monthly payment.
7. End of Lease Requirements
Your lease is up! What options do you have? You are required to maintain your vehicle in good condition (normal wear and tear), drive the agreed upon miles and take your vehicle into the dealership you purchased from or one that sells the same make of vehicle. If you do not want to lease another vehicle, you will be required to cover any disposition fees or extra charges based on the condition of the vehicle. If you are brand loyal, pick another vehicle when returning the vehicle after lease end and negotiate the disposition fees and drive off with a new car!
Larry H. Miller dealerships is the best place to shop for the best lease offers! View our inventory today and ask for lease specials!