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Car Leasing Questions

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Here is the list of car leasing questions that frequently asked and answers you will probably need if you are seriously considering to lease a car rather than buying it. Car leasing has become more and more popular lately due to zero down payment, low monthly payment, easy approval, low repair risks, and many other reasons. However, there are some problems with leasing a car in certain situations. Check out these frequently asked questions about car leasing and find the answer you want here.

What is car leasing?

Car leasing is the leasing of the use of a car for a fixed or indefinite period of time. It can be weeks, months, or years. It is one of the alternatives to use a vehicle rather than just buying it. After the lease is expired, the car must be returned to the leasing company or lessee can choose to buy it.

What is the difference between car leasing and car buying?

This is one of the frequently asked questions. Leasing versus buying a car has been debated for many years. If you go for car leasing, you don’t own the car, you enjoy a lower monthly car payment and zero down payment (most of the dealers offer this) but you have a limited miles and the car will never be yours. If you buy a car, you have to pay a down payment, pay higher monthly installment, responsible for major repair but the car is belong to you and you can sell it and get back some cash after years. However, both of them have the same thing, which is loan with interest!

What are the advantages for car leasing?

It is really good for people who are urgently need a car but with no down payment at all and with very poor credit that couldn’t even buy a used car. One biggest advantage for car leasing is that you don’t have to pay sky high monthly installment. On the other hand, car leasing is something good for anyone who needs a car for temporary. See also short term car leasing.

What are the disadvantages for car leasing?

This is one of the questions that must be asked, and must be answered. You will have to understand all the disadvantages before you sign any lease contract. If these facts do not affect you, yes you can go for car leasing. Leasing a car often give lessee limited mileage up to 12,000 miles a year. There will be extra charge to every extra mile.

How to calculate a car lease payment?

First, determine the monthly depreciation of the car you require. Second, determine the monthly finance charge. Finance charge can be very high if you are planning to lease a newer car. Sum up the monthly depreciation and monthly finance charge and you will know how much you have to pay every month. In other words, car leasing is just like you renting a car but you are paying off the depreciation and the car is never being yours.

Where can I find car leasing?

Car leasing companies, car dealers, car manufacturer’s leasing companies, some banks (except in Canada), credit unions, and independent leasing companies are all the places you can find car leasing. There is no law said that you must get it from car dealer or car leasing companies. Sometimes you can get better deal from banks or credit unions.

Should I lease a car or buy a car?

This is one of the frequently asked questions that has been asked for years. There are many factors to determine whether buying or leasing is better for your situation. For example, down payment, monthly car payment, major repair risks, and among others. Check out leasing versus buying a car for more details.

Can I end my lease earlier than the expired date stated in contract?

Typically, you are not allowed to do so. The expired date or end date is clearly sated in the lease contract and it is not designed to be terminated before the stated date. However, you can find someone else to continue your lease especially people who look for short term car leasing. Keep in mind that there will be some costs and headaches to go through.

What should I do if I drive over the stated miles?

Well, this is one thing that scares most of the consumers. No worry, money can solve everything, just pay the costs per mile stated in the lease contract. Vehicle depreciates in value for every mile that it is driven, therefore all you need to do is to pay the depreciation.

Is it possible to refinance my lease?

Yes it is possible and it is recommended to do so if you are able to get a better finance rate. Always remember that 1% in finance rate will save you up to thousand dollars in the end of the day. However, please check properly with the lease company if you are allow to do so, if you are allow to refinance, check all the charges and penalty and calculate and see if it is worth to do so.

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