What is Car Leasing? Frequently Asked Auto Lease Questions
How Does Leasing a Car Work? What is an Auto Lease?
If you’re wondering what is car leasing, or how does leasing a car work, then you’re in good company. Not everyone is familiar with all the pros and cons of leasing a car. There are, in fact, many auto leasing alternatives available these days.
In general, vehicle leasing is the rental of a car for a fixed time period. Automotive dealerships offer vehicle leasing as an alternative to traditional auto financing or purchase. It is often utilized by businesses when acquiring business vehicles. Generally speaking, leasing costs less than buying a car, although there are several restrictions, such as mileage limits and customization agreements, that can determine whether it is better to lease or buy a vehicle.
Today we are going to look at our ten most frequently asked questions regarding vehicle leasing.
Leasing or Buying a Car – Which is Better?
Is It A Good Idea to Lease a Car?
Can You Lease a Used Car?
How Much Does It Cost to Lease a Car?
Can You Purchase The Car You Are Leasing?
Do You Get Your Deposit Back From Auto Leasing?
Can You Lease A Car With Bad Credit & No Money Down?
What Kind Of Credit Score Do You Need To Lease A Car?
Can I Turn In My Leased Vehicle To A Different Dealer?
Does A Car Lease Include Maintenance?
Deciding whether to lease or buy depends on many factors. Do you drive a lot of miles annually? Do you like to keep your vehicle for a long time? If so, then car leasing might not be your best option. However, if you enjoy getting a new car, truck, or SUV every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Basically, the difference between auto leasing or buying really comes down to your financial, automotive, and personal priorities.
Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it’s already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.
There are many benefits of leasing a car that you just can’t get with other auto financing offers. Benefits like maintenance provisions, not needing to trade-in or sell an old vehicle, and lower payments. For more details on the benefits of car leasing, our vehicle finance department is ready to answer all of your questions.
Yes, you can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among auto dealership but most dealers do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with less than 48,000 miles on the odometer.
Most dealerships and manufacturers offer zero-down lease offers. Of course, there are varying factors that qualify or disqualify individuals from these kinds of leases. Factors such as credit payment history, credit scores, etc. Just remember that paying nothing down typically means greater monthly payments. Vehicle leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly
The majority of auto leasing contracts have buy-out clauses in them in case you fall in love with your car and decide to purchase it. Please note that the purchase price of the vehicle may vary. This depends on the vehicle’s residual value when the lease agreement has expired. There are options to purchase your leased vehicle before the contract has been fulfilled. For this, however, you must speak with a financing manager. Only they can provide these buy-out details and take care of any early termination fees that may apply.
Generally a lease deposit is only refundable at the conclusion of the lease. At least this is true when all leasing contract requirements have been met. Keep in mind that a deposit (a.k.a. a security deposit) is not the exact same thing as a down payment. Down payments are not refundable but security deposits typically are. It is important to note some leases require non-refundable deposits. Therefore, read your lease agreement carefully and ask as many questions as you have before you sign on the dotted line.
While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don’t worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team.
In general, credit score of 619 or lower is classified as “subprime”. While a subprime borrower won’t typically be automatically declined, a credit score lower than 619 means you will most likely have to pay a higher interest rate and/or down payment. Luckily, there are a lot of steps you can take to improve your credit score such as employment history, multiple loan requests, and consistent on-time payments.
Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It’s probably obvious, but you can’t turn a leased car into any other brand of dealership. You can, however, turn your leased Honda into any authorized Honda dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.
Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Specifics will vary within specific lease contracts, but most leases will cover your leased vehicle’s normal maintenance and service needs. These include fluid and filter changes, regular tune-ups, and regularly scheduled maintenance typically do not cost the lessee anything out of pocket.
Request More Info About Vehicle Leasing TodayIf you have more questions about vehicle leasing or our current offers, then contact us today. Our team of leasing specialists are on hand to respond to all your questions.
Have a question? We’ve got the answer!
* = Required Field
Frequently Asked Auto Lease Questions | Mike Smith Honda