Everything You Should Know Before Leasing a Car
There are not many people around who would say no to driving a fancy new car if they had the option. Thanks to car leasing, this is something that more and more people can achieve as leasing allows them to enjoy a new car without a huge up-front payment. It’s not that simple though, there are many things that need to be taken into consideration before you sign up to an agreement. Read on to find out everything you should know before leasing a car so that you can make the best decision for you.
Warranty Coverage Matters
According to recent statistics maintaining a car costs on average around £707 a year. Whilst it’s true that these costs are likely to be significantly lower when you drive a new car, you do have to remember that when you lease a car you are responsible for the maintenance costs. Always make sure you add the warranty coverage to protect you from unexpected costs. It is also worth noting that you will have to pay for any cosmetic damage on the car to be repaired at the end of your lease. Whilst most dealers operate with a fair wear and tear policy, anything considered to be over and above this renders you liable for fixing it.
Mind your Miles!
All car lease agreements have an annual mileage cap, you can negotiate what this is when you sign up to your agreement but you will have to pay more per month if you want more miles. Just make sure you get it right because you will be charged for every extra mile you do over the cap when your agreement comes to an end.
Drive Off and other Hidden Fees
When you enter into a lease agreement you have to make a down-payment, this is known as a drive off fee. Generally, if you pay a bigger drive off fee you can pay smaller monthly payments towards your lease so it might be worth paying more if you have the finance available. Always check your agreement for other hidden fees too but if you do get caught out, check out our blog post on dealing with emergency expenses.
Online Deals make Dealers Compete
Dealers have to compete with each other and because they can see each other’s prices online this gives you some bargaining power to negotiate yourself a cheaper deal. Have a read-up of a guide to getting the most competitive car lease deal to give you the confidence before you approach anyone.
Consider the Cost of Depreciation
It is a sad fact that the minute you drive your new car out of the garage it will already be worth less than what you paid for it. Whilst this will affect those who buy cars outright more, it can have an effect on your monthly payments. In general, a car that depreciates quickly will cost more monthly because the dealer will be looking to recoup their loss back.
You may well be faced with extra expenses at the end of your lease if there is any damage to the car or if you have gone over your annual mileage cap. You could choose to keep the vehicle if you wish, you would just need to make a balloon payment to your dealer to cover the difference between the value of the car and what you have already paid towards it throughout your agreement.