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Are you looking for answers about what is car leasing? or how does leasing a vehicle work? You’re in the good hands. Not everyone is familiar with all the pros and cons of leasing a car. In fact, there are many auto leasing options available.
In general, vehicle leasing is the rental of a car for a fixed time period. Auto dealers offer vehicle leasing as another option to traditional auto purchase or financing. It is often utilized by companies when acquiring business vehicles. Generally speaking, leasing costs less than buying a car, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to buy or lease a vehicle.
Today we are going to look at our ten most frequently asked questions regarding vehicle leasing.
There are many benefits of leasing a car that you just can’t get with other auto financing offers. Benefits like lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. For more details on the benefits of leasing, our car finance department is on hand to answer all of your questions.
The short answer to this question is: ‘it depends’. 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 like getting a new car 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. Basically, the difference between auto leasing or buying really comes down to your personal, automotive and financial 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.
Many manufacturers and dealerships offer zero-down lease offers. Like any financial product there are varying factors that qualify or disqualify customers from these kinds of leases. Factors such as credit payment history, credit scores, etc. Just remember that paying zero down typically means greater monthly payments. Vehicle leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
Yes, you can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among car dealers but most dealerships do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles.
Generally a deposit is only refundable at the conclusion of the lease. This assumes that all the leasing contract specifications have been met. Please note 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. Be sure to read your lease agreement carefully and ask questions before you sign on the dotted line.
The majority of auto leasing contracts have buy-out clauses in them in case you fall in love with your vehicle and decide to purchase it. Keep in mind the purchase price of the car may vary. This depends on the residual value of the vehicle when the lease agreement has expired. There are options to purchase your leased car before the contract has been fulfilled. For this, however, you must speak with a financing manager. Only they can provide this exact info and take care of any early termination fees that may apply.
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.
Typically, a credit score of 619 or lower is classified as “subprime”. While this type of credit isn’t 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 use to improve your credit score like making on-time payments, consistent employment history, and applying for loans too many times.
Maintenance provisions are one of the most popular benefits of leasing a car. Of course, specifics may vary within individual lease contracts, but almost all leases will cover your leased vehicle’s normal maintenance and service needs. These include filter and fluid changes, regular tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
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 Volkswagen into any authorized Volkswagen dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
Do 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 waiting to respond to all your questions.
How to Get Approved for Car Leasing | Gene Messer Volkswagen
