Car Leasing Q&A
Frequently Asked Questions About Leasing a Vehicle
According to the National Auto Dealers Association 31 percent of the new vehicles sold last year were leased. Here are some frquently asked questions and answers so you can determin if leasing is right for you.
What is Leasing? Isn't that just renting a vehicle?
Sure. You can call leasing whatever you want to - you're just paying to use a vehicle for a certain amount of time.
How many miles can I drive per year?
Leases start at 10,000 miles and go as high as 25,000 miles per year. You choose. Even if you drive 30,000 miles per year a lease may be right for you. The average driver puts on about 13,400 miles per year.
How much money do I have to put down?
You can put as little as $0 cash down to lease the vehicle, but most banks like to see at least your first payment, registration and acquisition fee.
Are there any vehicles I can't lease?
Yes. You can lease all new vehicles including Heavy Duty Trucks and diesels. You can even lease certified pre-owned vehicles. Pre-owned non-certified vehicles cannot be leased.
What if I get into an accident during my lease?
It's a good thing you didn't buy it. We all know that the value of a vehicle is affected when there is an accident on the history report. This may lean you towards turning it in. If the vehicle is totaled, most leases include GAP insurance, which is insurance that covers if there is a difference between what insurance determines as the value and the buyout on your lease.
What if I want to sell or trade before my lease is up?
It works just like a loan at the bank. You can sell or trade your lease anytime. You have a payoff with the leasing company that needs to be paid off.
What happens at the end of the lease?
You can either buy out your lease for the pre-determined amount or turn it in and lease or purchase a different vehicle.
What happens if I go over miles?
You simply pay $0.25 per mile. The mileage rate the government uses is $.58 per mile. If I pay $15,000 to trade up from my three-year-old vehicle with 36,000 miles to a brand new one - that's $.41 per mile. $0.25 is a steal.
Who pays for repairs on my lease?
When you lease a new vehicle, it is typically under warranty the entire duration of the lease so there are very few out-of-pocket expenses. However, you would be responsible for maintaining the vehicle with oil changes, tire rotations, and other regularly scheduled maintenance items.
What do you think the greatest benefit of leasing is?
When you lease a car, there are lower out-of-pocket costs up front and throughout the lease. Typically the monthly payment is lower and there is very little cash due at signing.