How Does Leasing a Car Work? What is an Auto Lease?
Do you want to know what is vehicle leasing? or how does leasing a car work, then you’re in good hands. Some of us may not be familiar with all the benefits of leasing a car. There are, in fact, many auto leasing options available these days.
Generally speaking, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed time period. Many car and truck dealers offer vehicle leasing as an another option to traditional auto financing or purchase. It is widely used by businesses when acquiring business vehicles. Generally speaking, leasing costs less than buying a car, although there are several restrictions, such as mileage limits and customization agreements, that can determine whether it is better to lease or buy a vehicle.
Let’s examine our ten most commonly asked questions regarding vehicle leasing.
Am I Better Off Buying or Leasing a Car?
Deciding whether to lease or buy depends on many factors. 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 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 financial, automotive, and personal 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.
Is Leasing a Car a Good Idea?
There are many benefits of leasing a car that you just can’t get with other auto financing offers. Benefits like lower payments, maintenance provisions, and avoiding having to trade-in or sell your old vehicle. For more details on the benefits of leasing, our auto finance department is on hand to answer all of your questions.
How Much Does It Cost to Lease a Car?
Many manufacturers and dealerships offer zero-down lease deals. Of course, there are varying factors that qualify or disqualify customers from these types of leases. Factors like credit scores, credit payment history, etc. Just keep in mind that paying nothing down typically means bigger monthly payments. Vehicle leasing, like traditional auto financing, works like this: the bigger the down payment, the lower the monthly payment.
Is There Such a Thing as Used Car Leasing?
Yes, you actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among auto dealership but most do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles on the odometer.
Can One Get a Deposit Back From Car Leasing?
Typically a lease deposit is only refundable at the termination of the lease. This assumes that all the leasing contract requirements have been met. Please note that a deposit (a.k.a. a security deposit) is not the exact same thing as a down payment. Down payments are not refundable but security deposits typically are. Also note that some leases require non-refundable deposits. Be sure to read your lease agreement carefully and ask as many questions as you have before you sign on the dotted line.
Can One Buy the Lease Vehicle?
Most auto leasing contracts have buy-out clauses in them in case 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 when the lease agreement has expired. There are also options to purchase your leased car prior to the completion of the contract. For this, however, you must speak with a financing manager. Only they can provide these buy-out details and take care of any early termination fees that may apply.
Is It Possible to Lease a Car with Bad Credit & 0 Down?
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.
What Kind Of Credit Score Do You Need To Lease A Car?
In general, credit score of 619 or lower is classified as “subprime”. While this type of credit isn’t automatically declined, a credit score lower than 619 means you will likely have to pay a higher interest rate and/or down payment. Luckily, there are a lot of steps you can use to improve your credit score such as apply for too many loans, employment history, and consistent on-time payments.
Is Maintenance Included With My Car Lease?
One of the more popular benefits of leasing a car is the maintenance provisions available in most lease agreements. Of course, specifics may vary within individual lease contracts, but almost all leases will cover your leased vehicle’s normal maintenance and service needs. These include fluid and filter changes, regular tune-ups, and regularly scheduled maintenance typically doesn’t cost anything out of pocket.
Can I Turn In My Leased Vehicle To A Different Dealer?
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.
Learn More About Car Leasing at Your Local Dealership
Do you have more questions about vehicle leasing, current promotions, or related topics? Then contact us today. Our team of highly knowledgeable car leasing agents are waiting to respond to all your questions.
How to Get Approved for Car Leasing | Shawnee Mission Kia