Did you know that nearly 25% of new cars sold in America happens under a leasing agreement? Coupled with low monthly payments and predictability, more drivers than ever before are considering the benefits of leasing their car, providing them with options in the future when they don’t have to mull over trade-in questions.
Although lessees don’t buy the equity in their vehicle – which depreciates over time – it’s still a solid, viable, and versatile option that opens up financial doors down the road.
Here are 4 important things to know about leasing a car in America today:
- It’s a “Pay For Use” Contract: Before you lease a car, it’s important to understand what leasing a car entails and what the actual lease agreement stands for. A lease allows you to pay for the depreciation you put onto a vehicle with a reasonable and affordable interest rate. You get to drive an asset that is going to depreciate regardless, for a certain amount of time, and then once you’re done, you get to walk away from it with no questions asked. If you’re someone that loves driving new and improved cars every couple years, this is exactly the kind of contract you want to consider.
- Understand the Common Terms: Like every financial obligation, leasing comes with its own set of terminology today. For instance, capitalized cost refers to the price of the vehicle, while capital cost reduction refers to the down payment. Residual value is the estimated value of the car at the end of the lease, and money factor covers the interest rate of the loan that’s taken out. Familiarize yourself with these terms so you know exactly what’s going at the time of lease signing.
- Negotiation Availability: Again, like most things today, you can negotiate a lease. It is not set in stone. Anyone intending to lease should at least attempt to drive down the capitalized cost, especially for individuals with good credit. These people can look to reduce or even eliminate the money factor altogether – with some persuasive negotiation skills. Even if you are signing on a leasing “special,” it’s still good practice to initiate a negotiation.
- No Money Down: What? How is that possible? One major advantage of leasing a vehicle is that is shifts depreciation risk from the customer to the manufacturer – it’s no longer your problem. In a lease, the down payment happens in the form of a pre-payment. If you terminate the lease before the end of the leasing period, you can lose the benefit of a down payment purchase. Putting no money down is a wise move for keeping the lease in your favor as the lessee.
Signature Auto Group Leasing Options
We want you to have a wide variety of leasing options with us today, providing you with round-the-clock support and information regarding our selections, monthly payments, warranties, and so forth. In order to make the process easier for everyone, consider this important information regarding the leasing process and how it is conducted in our country today.