Leasing a vehicle is very similar to renting an apartment. You will be making monthly lease payments, but in the end, the dealership still owns the vehicle. Long story short: you are simply paying to drive the vehicle.
If you are wondering whether or not leasing a vehicle is right for you, here is everything you need to know before doing so.
Look over the contract closely.
As with every contract, the verbiage and language can be dense and confusing. If you are a first-time lessee, take some time to familiarize yourself with these important terms.
Over time, a vehicle’s value will depreciate over time based on age, wear and tear, and mileage. Residual value is the value of the vehicle when the lease ends.
In a closed-end lease, the residual value of the vehicle is already agreed on between the lessee and dealer. This means that the driver will not have to pay any additional costs if the vehicle is worth less than the agreed-upon value at the time it is returned.
In an open-end lease, the future value of the vehicle is not mentioned or discussed. This means that the lessee will either receive a refund if the vehicle is worth more than expected, or will have to pay more if the vehicle has depreciated more than the dealer expected.
Pay less now and more later.
If you are in need of a new car but do not have the financing to purchase one at the moment, then leasing might be perfect for you. When leasing, the monthly payments are often lower than monthly car-loan payments.
It is important to note that even though you are paying less now, you will be paying more in the long-run. Paying off a car loan allows you to pay off the vehicle over time, but paying a lease provides you with no equity since you are not working towards owning anything.
Two options when lease ends.
Depending on the terms of your contract, the lease ends after a certain length of time has passed or once the vehicle has reached a specific mileage.
Once the lease has ended, you will have two main options: buy or return it to the dealer. If you choose to buy the vehicle, you can either pay for it upfront or apply for a used car loan and continue making monthly payments.
If you choose to return it to the dealership, you will be able to settle the account, pay any additional costs, and walk away.
Trick Trucks Has the Answers to All Your Vehicle Care Questions
If you want an upgrade, then come to see us at Trick Trucks. We are happy to make sure your truck is in great condition and is looking fresh all year round. We have over forty years of experience, so there is nothing we haven’t seen. Give us a call at 1-866-60-TRICK or visit us online. Follow us on Facebook, Flickr, Twitter, Google+, and YouTube to keep up with our newest projects and to gain inspiration for your next one.