Leasing, What is it?

When you lease you are paying for the use of a vehicle and not paying for the vehicle itself. Which means sometimes you can get more vehicle for less money.
Leasing is a popular method used to acquire a new vehicle, without actually having to buy a new vehicle.
A vehicle is leased for a period of time, during the time it is being leased the value of the vehicle will depreciate or decrease in value. Say you lease a $30,000 vehicle for two years and at the end of the lease you have used $15,000 of the value of the vehicle. You would divide the $15,000 by 24 months to get your monthly payments.
When leasing, you only pay for the amount of the vehicle’s value that is used. During the lease, you will be required to pay certain taxes, exclusive of payments. You are also expected to maintain the vehicle for the length of time. Note that vehicles do not depreciate evenly.
When the lease has ended the vehicle should be returned or you can choose to purchase the vehicle.

Is leasing the right thing for you?

Leasing is not for everyone. It all depends on your lifestyle and your preferences. You need to figure out whether you would want to lease or buy a vehicle. With leasing, you do not own the vehicle, when you buy a vehicle, it’s yours, you keep it until you are ready for it to be sold. When you purchase your own vehicle, you can do as you please and car buying is also more economical in the long run.

If you feel comfortable knowing that:

• At the end of a lease you don’t actually own the vehicle.
  
• Because lease contracts are not straight-forward, you are unable to ensure that you are actually getting a fair deal.
  
• Leasing becomes more expensive in the long run.
  
• You are only allowed to a limited amount of miles for the entire lease.
  
• It is harder to terminate a lease early if your driving needs change. You will be responsible for any early termination charges if you end the lease early.

THEN you may be ready to lease a vehicle.

How to Lease

• Find a vehicle that fits your needs and your budget, therefore you need to shop around.
• Choose vehicles that tend to hold their value well.
• Negotiate the price of the vehicle before you negotiate the price of the lease, this will ensure that the selling price does not influence the lease negotiation.
• Compare different lease offers and negotiate some terms and make sure to read the fine print.

• The agreed-upon value of the vehicle, because a lower value will definitely reduce your monthly payment.
• Up-front payments
• Length of lease
• The monthly lease payments
• Any charges or fees to be paid at the end-of-lease
• The mileage that would be allowed and per-mile charges for excess miles
• Whether your lease includes something called a “gap” coverage, which protects you if your vehicle has been stolen totaled in an accident.
• To avoid wear and tear charges take very good care of the vehicle.