If you’re wondering what is car leasing, or how does leasing work, then you’re in good hands. Some of us may not be familiar with all the benefits of leasing a car. In fact, there are more than a few auto leasing options available these days.
In general, vehicle leasing is the rental of a car for a fixed period of time. Automotive dealerships offer vehicle leasing as another option to traditional auto purchase or financing. It is often used by companies when acquiring business vehicles. In general, leasing costs less than buying a car, although there are several restrictions, such as vehicle mileage limits and customization agreements, that can determine whether it is better to buy or lease a vehicle.
Today we are going to look at our ten most frequently asked questions regarding auto leasing.
The short answer to this question is: ‘it depends’. Do you drive a lot of miles annually? Do you like to keep your vehicle for a long time? If so, then car leasing might not be your best option. However, if you enjoy getting a new car, truck, or SUV every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Basically, the difference between auto leasing or buying really comes down to your personal, automotive and financial priorities.
Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it’s already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.
There are many benefits of leasing a car that you just can’t get with other auto financing offers. These benefits include lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. For more details on the benefits of car leasing, our vehicle finance department is standing by to answer all of your questions.
Are you wondering how much it costs to lease a car? If you’re wondering how much does it cost to lease a car, the good news is that it’s negotiable. Many manufacturers and dealerships offer zero-down lease offers. Like any financial product there are varying factors that qualify or disqualify customers from these types of leases. Factors such as credit payment history, credit scores, etc. Just remember that paying nothing down typically means higher monthly payments. Car leasing, like traditional auto financing, works like this: the bigger the down payment, the lower the monthly payment.
Yes, you actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among auto dealership but most dealers do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with fewer than 48,000 miles.
Most auto leasing contracts have buy-out clauses in them in the event that you fall in love with your vehicle and would like to buy it. Please note that the purchase price of the vehicle may vary. This depends on the vehicle’s residual value after the lease agreement has expired. There are options to purchase your leased vehicle prior to the completion of the contract. For this, however, you must speak with a leasing representative. Only they can provide these buy-out details and take care of any early termination fees that may apply.
Generally a lease deposit is only refundable at the end of a lease. At least this is true when all leasing contract requirements have been met. Please note that a deposit (a.k.a. a security deposit) is not the same thing as a down payment. Down payments are not refundable but security deposits typically are. It is important to note some leases require non-refundable deposits. Therefore, read your lease agreement carefully and ask as many questions as you have before you sign on the dotted line.
In general, credit score of 619 or lower is classified as “subprime”. While this type of credit won’t typically be automatically declined, a 619 or lower credit score means you will typically have to pay a higher interest rate and/or down payment. There are a lot of steps you can use to improve your credit score like apply for too many loans, employment history, and consistent on-time payments.
While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don’t worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team.
Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Of course, specifics may vary within individual lease contracts, but most leases will cover your leased vehicle’s normal maintenance and service needs. These include filter and fluid changes, normal tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It’s probably obvious, but you can’t turn a leased car into any other brand of dealership. You can, however, turn your leased Kia into any authorized Kia dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
Do you have more questions about our current promotions, vehicle lease offers, or related topics? Then contact us today. Our team of leasing specialists are waiting to respond to all your questions.
How to Get Approved for Car Leasing | Kia of South Austin