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?When purchasing a new vehicle, you'll have the option to either buy or lease. Depending on your budget and driving habits, you'll consider this when choosing to lease or buy. How leasing works is one of the most common questions we get asked so we have simplified it here, so you can understand the process before you make a decision. To learn more about how leasing a car works continue reading.

A car lease lets you drive a new vehicle of your choice without paying a large amount of cash or taking out a loan. To lease a car, you make a small down payment which is usually less than the typical 20% of a car's value you'd pay to buy. After this, you'll make monthly payments for the term of the lease. A leasing term typically lasts three to four years. When the term expires your return the car and get a new one if you choose to continue leasing.

We mentioned that leasing is not for every lifestyle and here is why. You don't own the car when your lease expires, like when your monthly payments are made when you buy a car. You essentially are renting the car you choose. So, you don't have the equity in the car to use toward the purchase of another vehicle. Over time, say ten years, the cost of leasing several cars will likely exceed the purchase price of a new or used vehicle.

There are restrictions when you lease for example you can only drive a set number of miles which, if exceeded may result in you having to pay extra. You might also have to pay extra if you fail to keep the interior and exterior of the car in good condition, you drive the car and inflict significant wear and tear on the car's performance and appearance, and if you want to return the car before you contract expires. If any of these restrictions don't appeal to you then leasing a vehicle might not be your best option.

If you have any other questions regarding how leasing a car works we encourage you to give us a call!

Categories: People