When you are in the market for a new vehicle, whether it is a used vehicle or a brand new one off the lot, you have two options in financing the vehicle. One of these is the traditional auto loan method and the other is an auto lease. Leasing is not for everyone, so it is essential that you have all the facts before you get yourself into a lease and then find it difficult to break the lease.
Just as in a traditional vehicle loan, with a car lease you make monthly payments on the car for a certain length of time. This means that you can choose a short-term car lease for a specific length of time, which is usually two or three years. This is a shorter period of time than you would have with a loan allowing you to have a new car or truck every few years. You also have the option of leasing a really expensive car or truck for a longer period of time depending on your needs. The main benefit of leasing a vehicle is that you have a lower monthly payment over the course of a shorter term than you would have with a traditional auto loan from a bank or the company associated with the dealership.
When you take out a car loan, your monthly payments are a proportion of the full amount of buying the car, plus the interest rates charged by the lender. In a car lease, the payments are based on only a portion of the total cost of the vehicle. At the end of the term specified in the lease, you can bring the car back to the dealership and owe nothing or you can opt to finance the remaining portion of the cost of the car and buy it.
It is important that you first get an auto lease quote before you agree to the terms and sign the final lease papers. All auto dealers will give you a free quote that will not have any impact on your credit report because this is not an application for credit. You should have at least three quotes in order to do a comparison to find the lease that is right for your financial situation. When you do make your decision, you will have to submit an application to the lender associated with the dealership and wait to see if your application is approved. The lender will check your credit history to make sure that you are a good risk to repay.
One of the most important facets of a new-car lease is determining your driving pattern. If you do not do a lot of driving during the year, then a lease is right for you. This is because there is a certain number of miles that you are allowed to have on the car each year and if you do go over the total mileage amount you will have to pay extra money at the end of the lease. The amount per mile or kilometre for any mileage over the limit will be specified in your lease agreement. If you do a lot of driving, then it is possible that a lease is not the right option for you.
When you visit a dealership, you should ask about the specific policies the company has for a short-term car lease, if you would like to have a shorter than normal lease period. You can get a used-car lease option for a relatively short period of time, but why lease a used car when you can drive off the lot in a brand new vehicle?