Life these days is busy and fast-moving. We need to get to places promptly and get things done efficiently. For some of us, driving is imperative.
Unfortunately, buying a car does not come cheap and if it does, it is highly likely that the car will be unreliable due to it being worn out and faulty - this is a stress that most drivers would definitely want to avoid. Therefore, the option to be able to drive a nice new dependable car will be desirable to most people.
1. What does car leasing mean?
If you have never leased a car before, you will need to know what it entails. Car leasing simply means paying to drive a car. This is arranging with a car dealership to have a car that you would make monthly payments on, without actually owning the car. At the end of the lease agreement, usually a period of 2 to 4 years, you will return the car to the dealership without any entitlement of the car afterward.
This is a great way to quickly get on the road in a nice new car without having to come up with the large sum of money, which would be the case if you were to buy the same car.
2. Leases and loans
Another way to help you get on the road is to apply for a car loan. This is quite different from a car lease, as loans are agreed by banks and not car dealers. Together with the bank, you will decide on how much money you would like to borrow from the bank to pay for the car. You will then make monthly repayments to the bank until you have repaid all the money borrowed, plus interest. The car will then belong to you. However, generally, car loan monthly repayments are more expensive than lease payments.
How to Lease a Car?
Now that you know what leasing a car means, it is important that you have a good idea of how you can go about it. In order to make sure that you sign an agreement that is appropriate for you, some thought and planning will need to be done before you even approach a car dealer.
The following tips will guide you on what you need to think about and what you really should do before you sign on the dotted line.
1. Plan your lease deal
There are 3 major parts of a car leasing deal that you will have to agree on with the car dealer.
Lease duration: how long you plan to lease the car.
Money down or drive away fee: the money paid before taking the car and beginning monthly repayments
Maximum mileage: how much you will use the car and how much wear and tear the dealer can expect to see when the car is returned to them.
These 3 areas will have a direct effect on the price of your repayments.
It is very important that you can afford your monthly repayments - as not being able to meet it at the repayment date is one of the worst things that could happen once you're signed into a lease agreement. A clever way of finding out approximately how much a dealer will tell you your chosen car will be is to use an online lease calculator. You will be asked to enter the necessary details for an estimation of repayments to be calculated. If it is not within your budget you will be able to make the changes required to ensure the repayments are affordable for you before even setting foot in a car showroom.
3. Find the average prices
You might find that different dealerships have roughly the same car that you would like to lease. Spend some time finding out what the prices are so that you can identify which one is offering the best price. Bear in mind each dealership will have different cost additions that will only become apparent once you have enquired further.
4. Shop around
Once you have a good idea of how much your chosen car will cost to lease, the best thing to do next is to get quotes from at least three other dealers. Not only will this allow you to make the best choice, but it will also encourage your dealer to offer you a competitive rate to secure your deal with them instead of their competitors. So be sure to let them know that you are shopping around for the best deals!
5. Always ask for a better deal
Following on from the previous point, do not be afraid to negotiate. Offer slightly less than the amount you are told. Tell your dealer if another car retailer is offering a discount or better deal on their cars. Be prepared to make some changes to the plan you initially made, if it means securing a more favorable deal for you. If you are able to agree on a lower cost than you expected, you will be very happy that you asked!
6. Time to test drive
It's not necessary for you to test drive all the cars that you got quotes for (although it certainly would be fun). However, it is very important that you do test drive the car that you have come to an agreement on before you sign your deal. Make sure the car sounds nice and quiet and drives as well as you expect it to. Be sure to check the controls to make sure that everything is working perfectly if not, make sure you point it out to your dealer and they repair it and make a note of it in their records. Check all around the body of the car for any scratches, dents or any signs of damage that you do not want to be held responsible for.
7. Sign on the dotted line
When you are happy that everything is the way you want it to be; from the details of your agreement to the condition of the car -you can now make the deal and sign your car lease agreement documents!
How to Get the Best Deals?
Here are some additional tips on how to get the best deal on your car lease. The most common and successful tips are explained above, below are some extra information that might also help you keep the cost of your car lease low.
If you want more details on these or are seeking more hints and tips, there are plenty of resources online where you can do more research.
- Understand the language of leasing
Leasing a car can be a very technical task, make sure you understand the terminology in the deal by reading up on it beforehand or simply asking; "Sorry, what does that mean exactly?”
Capitalized cost: Or the cap cost is the price of the car alone, it is not the manufacturer's suggested retail price. The cap cost is the number you will seek to reduce.
Buyout price: This is the price the dealer will give you if you decide to buy the car at the end of the lease agreement period. It may not necessarily reflect the actual outstanding value of the car. A deal in this area can be a good way to lower your repayments. Make sure you negotiate this at the beginning of your agreement as you might not be able to change the terms at the end of it.
No extended warranties: Do not be persuaded to purchase any add-ons or warranties beyond what is included in the agreement. A good car dealership will have a fair warranty on all cars they offer already. Anything they offer to extend it is likely to be unnecessary. This applies to extra add-ons. Any insurance you require can be sold to you by insurance companies that offer competitive rates, your car dealer is unlikely to beat it, as these additions are designed for them to make more money from you.
- Seek for the cheapest ads
Do check out the cheapest advertisements you see. Car retailers have periods when they offer great deals on their car leasing, so if you are lucky enough to see one at the time you are looking for a lease, do check them out!
Following the tips and advice above will prepare you with some basic knowledge of car leasing. However, when it comes to the tricky task of choosing your car and lease agreement, the more information you have the better! Be sure to do as much research as you can, this way you can truly enjoy all the benefits of your choice to lease.