Leasing a Car? Here Are the Basics You Need to Know

Once you’ve it’s time for a new vehicle, you have some decisions to make.

One of the biggest is whether you’ll lease or buy your new ride.

It’s important that you make an informed decision to save yourself trouble down the road.

Here’s what you need to know about leasing a vehicle.

How a vehicle lease works

The bottom line is that you’re paying a leasing company for the ability to drive a vehicle they own for a specific period of time.

It’s usually between two and three years.

The purpose of your payments is to cover the cost of the car’s depreciation. This is why payments are typically cheaper than what you would pay for a loan to purchase the car.

Another benefit of leasing a vehicle is that you’re able to constantly be driving new vehicles.

There are a few downsides, however.

You’ll probably wind up paying more over the long-term than you would if you purchased the vehicle and drove it for years.

Plus, there are certain restrictions that you’ll have to follow that will be detailed in your lease agreement.

Let’s take a closer look at those restrictions.

1. Mileage fees

You’ll be allowed a certain number of miles to drive your leased vehicle over the course of the agreement.

It’s typically 15,000 miles or less.

A set fee will be imposed for every mile you go over the mileage limit.

2. Maintenance

All vehicles need routine maintenance. It’s possible that your car could even need a major repair.

Make sure you know what you’re responsible to pay for.

3. Excessive wear

Your lease agreement will probably state that your vehicle should ONLY show “normal” wear. 

It’s important that you know exactly what kind of wear-and-tear you’re allowed and what will cost you extra money in fees.

Get expert advice

A great car dealership will be able to answer your questions and walk you through the whole leasing process so that you understand exactly what you’re signing on for.

At Serra Auto Park, our knowledgeable advisors have the expertise to guide you into an agreement that works for you.

Categories: Finance