Leasing a car is an excellent way to get a vehicle that you can use for personal or business purposes. There are car lease companies that can offer cheap car lease deals if you are on a limited budget. Before you sign any contract, you need to remember these tips.
Leasing can affect your credit score
Just like when you buy a new car, your decision to lease could also have an impact on your credit score. If you fail to pay the monthly bills on time, it could adversely affect your credit score. If you start timely payments again, your score could go up. Make sure that if you decide to lease a car, you are ready to pay the cost for the next few years.
Understand the leasing terms
As you speak to your car lease dealer, you might feel confused if you hear some terms that are very technical. Instead of the original price of the vehicle, you might hear the term capitalised cost. Instead of down payment, you might hear the term capital cost reduction. Understanding these terms will make it easy for you to negotiate with the dealer and avoid signing a terrible deal.
You can negotiate any lease
If you are considering a pre-leased vehicle, you will realise that the car lease cost is cheap. It is normal for the amount to be that low considering that the vehicle has already depreciated. If the first use of the car was several years ago, the depreciation value might even increase. Despite that, you still need to negotiate. The price could go down even more if you convince the dealer.
Find a lease that does not require a down payment
The reason why some people prefer car leasing over a brand-new purchase is that the contract usually does not require a down payment. You do not need to worry about where to get the cash for a down payment. If the company requires you to pay before delivering the vehicle, the amount is either a pre-payment or deposit. If it is a deposit, you can claim the money back once the lease is over. If it is a pre-payment, it helps reduce the required fees for the subsequent months.
Make sure that the car lease has comprehensive insurance. You do not want to pay for the monthly car lease fees and also pay the insurance company for coverage. Check the coverage of the insurance too, to ensure that you will not face any problems if the car is involved in an accident or has some cosmetic flaws at the end of the contract.
Once the lease is over, you will return the vehicle and get your deposit back. You might be liable for a penalty charge though if there are unacceptable flaws or you went beyond the allowable mileage. You can dispute the charges, or you can have someone fix the damage before the end of the lease.