Thinking of trading in your old ride for a new one? If you are, you might want to consider leasing instead of buying. This is especially true if you’re someone who likes to drive a new car every year or two. If you are considering leasing, what follows are some tips to make your lease work in your favor...
The first step is to do your research when deciding on what car you want to lease and how much you can afford to spend on monthly payments. Be sure to check on auto insurance, so you can factor that amount into your monthly budget.
According to Edmunds, it’s a wiser move financially to get a lease with no down payment, even if it means making higher monthly payments. This is because if you crash the car soon after you get into the lease, your insurance won’t reimburse you for your down payment, which is also called a cap reduction. That means you’ll have to forfeit that money. Edmunds suggests that if you need to get a lower payment to meet your budget, it’s better to take the funds and set them aside to be put towards your monthly payments than to use them as a down payment.
It’s important to research incentives on lease deals to find the best one for your needs. Make sure you uncover any fees that might be hidden in the agreement that will end up driving up the price of your lease. Also, make sure that the vehicle in the lease deal has all of the options you want. If it doesn’t, adding them on can add a significant amount to your contract. Be sure to get multiple quotes to ensure you get the best lease contract.
Once you agree on a lease, review the contract carefully before signing. Be sure to note the length of the lease (Edmunds recommends 36 months) and the stated amount of cash due upon signing, if any. The number of payments is another thing to verify, as well as the monthly payment amount and gap insurance. GAP is an acronym for Guaranteed Auto Protection. It’s a must when leasing because you don’t own the car outright. In the event of an accident, your insurance company will reimburse you for the current value of the car, but the amount you owe on your lease could be more than that. GAP insurance will cover you for the difference so you don’t have to end up paying it to the leasing company out of pocket.
Finally, when you take delivery of your vehicle, inspect it carefully to be sure there aren’t any dents, dings or interior damage for which you might be held responsible. Be sure to get an extra set of keys and an owner’s manual.
Follow these few steps and you can be assured that you’ve done your homework and gotten the best lease deal on your new ride when you drive it off the lot.
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