Somehow, you blinked your eyes yesterday and became a grown up. You’re not sure how it happened, but you have a job, bills to pay, and places to go. Unfortunately, you’re an adult without a car. You need transportation, and fast, but you can’t afford to buy one and really don’t need any more loans. Plus you haven’t even begun to compare auto insurance quotes. The good news is you can still get a car! All you have to do is lease it.
You may be wondering “How does that even work?” and thinking “That sounds way too good to be true!” It’s not too good to be true, but you certainly need to be informed before walking into a car dealership and signing up for another expense.
Here are a few things you will need to know before signing a lease:
What to look for in a car:
Choosing a car to lease is quite different than choosing a car to buy.
With a purchase, the car is yours to use as you will. You don’t have to limit the number of miles you drive or worry about every single scratch in the paint. You do, however, have to worry about the cost of repairs and maintenance.
With a lease, the car is yours for three years; over those three years, you cannot exceed certain mileage and must keep the car in pristine condition. You won’t have to worry about any repairs or maintenance, as the car is usually covered under warranty throughout the duration of the lease (you will want to negotiate this into your lease terms to be certain).
When choosing a car to lease, you want to look for cars with low depreciation, meaning they hold their value well over time. This will lead to your monthly payments being lower and help you get the best deal. Edmunds, an online car-buying and leasing guide, is a great resource for determining a car’s expected residual value.
What to look for in a lease agreement
Once you’ve found a car that you're interested in leasing, start by looking for manufacturer lease deals and contacting individual dealerships about available lease specials. If the vehicle you want to lease has a current promotion, that’ll certain save you some dough.
But don’t get too excited and jump to signing a lease after you hear about a promotion. You will want to effectively negotiate the lease terms. For example, the promotion may have seemingly low monthly payments, but sky-high drive-off and other hidden fees. These fees can be reduced, so asking about them is important. You also want to make sure your lease does not have a really high interest rate. Financing through a dealership can be tricky, so ask for a breakdown of the reasoning behind the interest offered if it seems really high. Also, check with your bank or credit union to see if they can offer you financing with a lower interest rate.
Another factor of your monthly payment will be the allotted mileage. If your commute is only five miles each way and you do little other driving, you can negotiate a lower mileage allowance to reduce your monthly rate. If you have a 40-mile commute and love road trips, you will want to see how high you can negotiate the mileage allowance, so you don’t end up paying a hefty fee for each extra mile you drive.
If you’re not sure how long you will really want or need your lease, you may want to ask about whether or not the lease can be transferred to a new owner and negotiate this into your lease agreement.
Regardless of what kind of car you lease and what your lease terms are, car insurance is requisite. Find auto insurance quotes today with CoverHound.