What is Car Leasing? | Is Car Leasing Right For Me?
Here’s the short of it – Want to drive a new car without the big monthly payments that typically can come with buying a car outright? Leasing a car can allow you to drive a new vehicle for less per month than you would typically with an auto purchase loan for the same car. However, when the lease ends, you won’t own the car, unless your lease contract gives you the option to purchase the vehicle from the dealer.
When you lease a car, you’re paying to drive a new vehicle — not to own it.
A car lease is a popular type of auto financing that allows you to essentially rent a car from a dealership for a certain length of time and amount of miles. You will typically make monthly lease payments on a vehicle, and in exchange the dealer allows you to drive it. At the end of the lease, you can choose to either return the vehicle to the dealership or buy out your lease if you want to keep the car, if that’s an option in your lease.
You’ll typically need good credit to lease a new car. Also, even though you don’t own the car you’re leasing, your lease-payment history will show up on your credit reports.
So, ask yourself the question – Is leasing right for me?
Depending on your desires and lifestyle, it can still make sense to lease instead of buy. Here are a few times to consider leasing.
- You want to drive brand new cars or trucks. If you exclusively lease new vehicles, you’ll enjoy the benefits of a new car without the hassle of selling a used vehicle each time you trade up. You’ll also get the latest tech and safety features.
- You don’t want to own a vehicle. If you view car ownership as a pain or hassle, a lease may be a good choice for you. Lease agreements may include service contracts that can make dealing with maintenance and repairs more convenient.
- You only need a car for a short time. Perhaps you’re living somewhere short term and need a car. In that case, taking out a two-year lease may make more sense than buying and selling a car before moving.
After looking at these, is leasing still not the best decision – read our page on Buy vs Lease to weigh the options out more.
Alright, so you’ve decided you want to lease, what is the next step?
- Set a budget. Figure out the monthly payment you can afford, this applies to leases and loans. You don’t want to stretch yourself too thin.
- Get your Trade-In Value. Do you have a vehicle you are going to trade-in? You can get your value here with our Instant Cash Offer tool. This also can help you set your budget.
- Know your mileage. Almost every lease has a mileage allowance. You want to be honest and upfront with your mileage, so do some math – figuring in your typical commute and if you take some roadtrips. Typically leases are more ideal for those with less lengthy commutes, but we can work with you to figure out what’s best.
- Know your credit score. You’ll typically need good credit to lease a new car. There are many free tools that give you estimates on your current credit score. You can also get your actual credit score pulled from Equifax, Transunion and Experian. This will give you an idea of how good your credit score is and if you’re a good candidate for leasing. If not you can always get a loan.
- Look for lease deals. Manufacturers tend to put out new lease deals monthly. They also can potentially give more incentives towards the end of the month, or for a special period – like a Summer Clearance Event. We put all our specials here – which give you some lease examples.
- Reach out to our team. Still have questions – or want some actual numbers? Our team would be happy to help, we have a no-pressure experience that values you – the customer – above the sale itself. Fill out the form below and we can reach out to you with more information.