Some individuals need a vehicle but are not ready to purchase a vehicle. Renting a vehicle long term may become costly. Leasing is similar to renting a car over a long period of time. Individuals who cannot afford a vehicle will often select this option because the monthly payments are typically lower than purchasing a vehicle. The lessee is responsible for maintaining the car and returning the vehicle at the end of the lease according to the agreed upon contract. At the end of the contract, the lessee will often have the option to buy or the option to return the vehicle.
Consumers also prefer the option of leasing, because many occupations receive tax breaks for leasing a vehicle. This option allows the individual to drive a new car without the commitment of purchasing a vehicle. Many car companies often offer lease specials to entice customers to purchase the vehicle. The payments may be as low as $100 per month. However, the consumer may need a large down payment, as well as, a security deposit to secure the vehicle. The consumer also may be held responsible for paying mileage over a certain amount per year. Leases often involve many hidden clauses that consumers must review before signing.
Consumers are allowed to lease cars over several different lease periods. The lease periods are as follows: two, three, four, or five years in length. The three year lease is the most popular lease for individuals. Most car manufacturers offer 3 year bumper to bumper warranties in addition to the lease. Most individuals who purchase a vehicle begin to notice it aging after 3 years approximately. Leasing every three years allows the consumer to drive a new vehicle on a consistent basis.
Consumers should shop for a competitive lease. A competitive lease should include high mileage allowances, low down payments, low financing and no security deposits. Example of a competitive lease may include the following:
• Monthly Payment: $139 to $400
• Down Payment:$0 to $1500
• Security Deposit: $0
These types of deals are rare. They are usually on reliable, affordable vehicles. However, the deals are based upon the lessee’s credit score. Individuals with “Poor” to “Good” credit scores may not qualify for the premium leasing deals that are advertised. In those instances, the down payment or security deposit may increase. Extending the length of the lease will also lower the monthly payment required. This is undesirable to most people because they are investing in a vehicle that they will never own. Maintenance costs also increase as the cost of the lease increases.
One of the most affordable cars to lease is the Mini Cooper. The MSRP of the Mini Cooper is $26,050. The 3 year residual value is 50%. This is considered a good residual value. Consumers can expect to pay $401 each month for 3 years. The vehicle does not offer incentives many incentives on their vehicles because of its reputation. The payments on this vehicle are comparable to if the consumer purchased the vehicle.
- How to Lease a New Car?
- What Does it Mean to Lease a Car?
- How Much to Lease a Car?
- How Much is it to Lease a Car?
- How to Lease a Vehicle?
