Why Vehicle Leasing Is Not The Same Thing As Financing
Accurately interpreting your car or truck lease agreement conditions and definitions can seldom be described as a straightforward accomplishment, especially by some of us who like a more vernacular English. For better understanding, leasing is not buying. In fact, it’s similar to renting. As such, the most essential conditions are in regards to responsibility, ownership, and liability. These include leased vehicle insurance, wear and tear, and lease return or extension.
Getting insurance on a leased vehicle is no different than getting insurance on any other vehicle. With leasing, however, the lease terms typically obligate the lessee to secure comprehensive auto insurance. In short, the leasing company owns the car, the lease lays out obligations that allows you to drive it. One of these conditions is full protection, also known as comprehensive insurance.
Normal Wear & Tear vs Excess Wear & Tear
A normal vehicle lease agreement most likely clarifies exactly what is designated as excessive vehicle wear and tear. This is critical because when you return your leased car, truck, or SUV you may be liable for wear and damage that falls outside of the agreement. Now, if that makes you uneasy, then make sure to inquire about additional Insurance to take life’s uncertainties out of the thought process.
Lease Extension or Return
We recommend approaching the company you leased from leading up to the end of the contract and confirm your end of lease obligations. In addition to completing a lease return inspection, you might also want to request a lease extension or an auto lease buyout. One allows you to extend your lease for an additional period of time, while the other permits you to buy your leased car.
Frequently Asked Questions – Lease Terms
Am I Able To Use My Current Car or Truck as a Trade-In?
Yes, you can use your car on trade. Taking advantage of the equity from your trade-in can lower your monthly fee, but it will not alter the total cost of the lease agreement.
What is the Difference Between Normal/Excessive Wear?
Leasing dealers typically determine the difference between excessive wear and tear in their lease contract terms. The ultimate decision is typically based on size, cost of repairs, missing equipment, and permanency.
What is a Lease Extension?
A car or truck lease extension allows you to extend your current lease agreement for a longer time. There are many factors but this could be 6 months, 12 months, or even go month-to-month. The best way to find out is to ask.
