Three Tips for Leasing a Car
Auto leasing is on the rise as more and more consumers are choosing to rent a car rather than buy. Nowadays, about one out of every four new vehicles is leased instead of bought in the U.S., with the percentage of car leases increasing significantly over the past few years. In 2014 leasing accounted for approximately 27 percent of all car sales, compared to 22 percent in 2012, research shows. If you are considering leasing your next vehicle, keep in mind the following tips.
1. Know the Difference between Leasing and Buying. When you lease you are permitted to drive a vehicle for a fixed period of time, such as 1 or 2 years. Car values depreciate over time, so when you lease a vehicle your monthly payment is going toward that depreciation. Once the lease contract expires, you can choose to buy the car or lease another vehicle. Leasing is appealing to consumers for several reasons. Leasing allows you to drive the newest vehicles; there's no long-term commitment; and the monthly leasing payment is usually cheaper than the loan payment for buying the car.
2. Compare Lease Deals. Compare the lease deals offered by the various car dealerships in your area. Toyota lease deals will vary by dealership. So, if you are interested in the newest Toyota sedan in New Jersey, then compare the Toyota lease deals offered by the various car dealerships in NJ. One may offer zero cash at signing, while another may offer a low monthly payment, and another offers both.
3. Know How Many Miles You Drive. A car with higher mileage has a lower value than a car with fewer miles. Therefore, the amount of miles you drive will affect the lease payment. A mileage agreement of 10,000 miles will cost less than an agreement of 15,000 miles. While you may be inclined to choose a lease agreement with a lower mileage, it's important to be realistic about how many miles you drive. If you exceed the mileage agreement you will be charged approximately $1 per mile thereafter, which can get pricey.
Be sure to consider these tips when leasing your next car. Try this lease calculator to determine if leasing is the best option for you.
