5 Most Important Factors to Consider When Leasing a Vehicle

Leasing a vehicle instead of buying one is an excellent option for many people. There are several benefits to leasing, including lower monthly payments, lower upfront costs, and the ability to stay in a new car with the latest technology features. Before getting into a lease though, there are some things you should know. Here are the most important factors to consider when leasing a vehicle.

How Much Money Is Due at Signing?

While leasing a vehicle often comes with lower upfront costs than buying a car, there are still some costs involved. Ask the dealer about any fees you might be responsible for when you sign the lease. If there are high out-of-pocket costs and a down payment needed, you might want to renegotiate a better deal.

How Many Miles Does the Lease Include?

All leases come with mileage restrictions. This means that you can put a certain number of miles on the vehicle each year and if you go over, you’ll have to pay a mileage fee when you turn in the vehicle. If you don’t drive many miles each year or have a short commute to work, a lease is an excellent option. If you have a long daily commute or if you travel a lot, then you might want to consider other options.

What Is the Money Factor?

The money factor in a lease is the equivalent of interest. If you don’t see the amount clearly stated in your lease, make sure to ask. The money factor will be in decimal form and when you multiply it by 2,400, you can get the equivalent interest rate. Make sure that the money factor is not higher than the interest you would pay on a car loan.

Take the Length of the Lease into Consideration

Most lease agreements last for three years, but some can be shorter or longer. When you lease a car, it is important to make sure the lease period either matches the warranty period or ends before the warranty period. If you keep the vehicle for longer than the warranty, you’ll want to consider an extended warranty, so you’re not responsible for maintenance or repair costs.

The Importance of Gap Insurance

Gap insurance is important to have when you lease a car. This type of insurance covers the difference between what your regular insurance covers and the balance of the lease. If something happens to the vehicle during the time of the lease, you won’t get stuck without a car but still have a lease balance due to the dealership. Some lease agreements include gap insurance, so you should look over the contract to see if it’s covered before adding it.

Leasing a car instead of buying one allows you to stay in a newer car so you can keep up with all the latest technology and safety features available plus, you can do it with lower payments. Just make sure to take these five things into consideration before signing a lease agreement.