Finance

What To Know Before You Sign A Car Lease

3 Mins read

You’ve decided you want to lease a car, but before you sign on the dotted line there are some important things to know. 

You need to be prepared with the right information so you can make the smartest decision about which car to lease.

There can be hidden costs and fine print so always double check before committing to anything.

With our guide, you’ll be able to make an informed decision when it comes time to lease a car through a great company like Lease Loco.

Car Lease

Choose Your Car Carefully

The car leasing process can be overwhelming for a first-timer, and it’s important to know what you’re getting into. There are many different things to consider when deciding whether or not leasing is the right choice for you, including:

  • Budget
  • Car size 
  • Features
  • Lease length
  • Extras

These are just some of the things you need to consider when choosing the right car to lease.

Before Starting The Process, You’ll Need To Decide How Much You Can Afford To Pay Every Month

Before you sign any paperwork, it’s important to understand the full cost of the vehicle. This includes your lease payment, insurance, maintenance and fuel expenses. Fuel expenses are a great reason to lease electric cars and another great reason to go green.

Your budget will also determine how much mileage you’re allowed per month or year.

If your budget doesn’t allow for fuel and maintenance costs on top of your lease payments, then consider limiting your driving distances by choosing a lower-mileage car.

Be sure to keep track of all these expenses so that they don’t come as a surprise when the bills arrive in the mail!

You’ll Probably Have To Pay An Initial Payment When You Sign Your Lease Agreement

When you sign your lease agreement, you’ll need to make an initial payment. This is a lump sum that’s paid upfront and comprises a percentage of the total lease amount. 

The percentage ranges between 10% and 20%, but it’s usually closer to 10%. You can pay this initial payment in cash, debit or by credit card.

You’ll Be Charged A Monthly Fee For Mileage That Exceeds Your Agreement Limits

It’s important to understand that you will be charged a monthly fee for excess mileage. 

You can agree to pay a lump sum for excess mileage at the end of the lease, but you don’t want to pay a huge amount at the end of the lease period. 

It’s best if you know how much you’ll spend on fuel before signing your lease agreement, so that way when it comes time to fill out the paperwork, all of your numbers are correct.

Again, consider going electric for fuel savings!

When Leasing A Car, You’ll Be Responsible For Its Depreciation Value

This is the difference between the value of a vehicle at the beginning and end of your lease term. Depreciation is based on two factors: age and mileage. 

This is always your responsibility and it encourages you to drive responsibly in order to keep the car’s value as high as possible. The higher the value the less you pay!

Failure To Take Proper Care Of The Vehicle Will Almost Certainly Result In Charges At The End Of Your Lease Term

While your monthly payment will be lower than it would have been with a purchase, the amount you’re paying each month is a loan against the car’s value. 

If you fail to take proper care of the vehicle, it could lose value and/or be worth less than what you owe at the end of your lease term.

That’s why there are rules about how much you can drive your leased car (and when), as well as what types of roads and conditions are acceptable for driving them on. 

These rules vary by manufacturer but generally include:

  • Driving over a fixed amount of kilometres per year
  • Driving more than 12 consecutive months before turning it in (unless otherwise agreed upon)
  • Using certain types of fuel instead of others

Car Lease

Conclusion

These are just a few basic points to consider when leasing a car. 

The good news is that most lease agreements are simple and straightforward, so you won’t have any difficulty understanding what you’ve signed up for or how much you’ll be paying. 

If you keep these tips in mind, you should be able to avoid costly mistakes and get the best deal possible on your new car.

About author
Breanna, with the help and support of BeDoper's audience, provides fresh news on the tech and EdTech daily to your screen. Stay connected with Breanna on FB, Twitter, and Pinterest to spice up your feeds and productivate your time.
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