Car leasing is an option to consider if you’re in need of a vehicle but can’t pay for one outright. Car leasing has different reputations depending on who you speak to; some strongly recommend it and others warn you against it, mainly for financial reasons but also due to the demanding terms of most lease agreements. Considering that you don’t end up with ownership of the car, making the monthly payments can be a frustrating thing to have to do.
However, it is important to remember that cars depreciate in value. So, depending on the car, you may end up making less of a loss than if you’d bought and sold it. Plus, the lease provider will carry out any mechanical work required. If leasing seems like a good option for you, there are certain rules you can follow to make sure you avoid the potential pitfalls.
Application
When it comes to leasing a car, you should spend time comparing different deals to make sure you find one that suits you. You can lease all kinds of cars, from small run-arounds to bentley lease specials, so don’t be tempted to live outside of your means just because it seems accessible. Read the small print on the agreements too to make sure you’re aware of any hidden fees and costs.
Applying for a car lease can be very straightforward compared to taking out a loan for example. Banks will ask for a full financial history and evidence of your average spending habits, whereas most leasing companies just carry out a simple credit check. Make sure you have a strong credit history before you apply, as these checks will affect your score.
Terms
There will be a number of different terms associated with your lease agreement, which you will need to stick to while you have the car. Your monthly payments will need to be met without fail or you will face a fine, but luckily some companies are flexible and will re-negotiate your payment schedule if you need them to.
Most lease lengths are two to three years, which is a big commitment considering how much your personal circumstances can change in that time; however, you need to see it through until the end to avoid having to pay an early termination fee. Something else to consider is the fact that you will not be able to take the car abroad without permission from the provider, so if you do have plans to go on holiday, make sure you discuss this with them first.
Maintenance
One of the trickiest parts of car leasing is remembering to stick to the general maintenance terms of the agreement. You need to look after the vehicle probably, more so than you would if you owned it. You need to keep it clean and damage free, which includes repairing anything like dents in the bumper or cracked wing mirrors. You also cannot exceed a certain mileage in it per year. You can’t make modifications of any kind to it, and you need to make sure it is available for the regular mechanical work they will carry out on it.
As long as you have a strong credit history, you’re able to make the payments for the specified amount of time, and you look after the vehicle well, car leasing can be a great idea. When it comes to choosing what kind of car to lease, have a look at this article which explains the top considerations you should be making.