SHOPSMART AUTOS – CUSTOMER INFORMATION – JANUARY 6, 2021
LEASING A VEHICLE (PT.1) If you could get a new car every few years, with the latest features and technology, at a monthly price that’s affordable, would you? Leasing a new car offers you that opportunity, but you need to know how to do it right if you want to get the best deal. Auto leasing started as a way for companies to easily expense their vehicle costs and luxury car drivers to always have the latest and greatest models. Today, new car leasing has broad appeal, with about three in 10 cars leaving dealerships leased rather than purchased. You can lease almost any vehicle, from subcompact cars to luxury large SUVs. With leasing, you just pay for the depreciation that occurs over the term of the lease, plus interest and fees. While that sounds simple in concept, it can be much more complicated in practice. Leasing can be tricky and expensive if you’ve never done it before, and coming prepared with a bit of knowledge can go a long way in making your leasing experience a pleasant one. Here’s what you need to know when it comes to how leasing a car works.How Is Leasing a Car Different Than Buying a Car?
When you buy a new car, you have to pay the entire price of the vehicle using cash, a car loan, the proceeds of a trade-in, or a combination of all three. When you lease a car, you only have to pay for the difference between the vehicle’s price and its expected value at the end of the lease, plus interest and fees. Say you find the perfect SUV with a $30,000 price tag, and it’s expected to be worth $20,000 after three years. If you lease it you just have to pay for the $10,000 in expected depreciation, plus interest and fees. If you buy it, you have to pay the full $30,000, plus interest and fees. At the end of a lease, you return the vehicle to the dealership you got it from or, in some cases, another of the brand’s franchised new car dealers. There may or may not be some lease-end costs, depending on how much of a security deposit you made at lease signing. You’ll then have the ability to purchase your leased vehicle, lease a new vehicle, or just walk away. When you lease a car, you have no ownership interest in the vehicle. The title is kept by the leasing company, and you’ll have specific limits on how you can use it, how many miles you can drive without a penalty, how you are expected to maintain it, and what condition it must be returned in. A lease is a contract that cannot be easily broken without incurring substantial penalties. When you purchase a car, you can sell it at any time without penalty. You can’t do that with a leased car. Make It A Champion Day!
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