Car Lease

A car lease is like renting your car for two to five years; you get to use it during that time, but you don’t own it at the end. The main benefit is that your car lease payments will be lower than the payments you would have made if you took out a loan to purchase the car.

Before signing on the dotted line, you should keep a couple things in mind:

Length – Car leases require you to make payments for a certain length of time, which can range anywhere from 24 months to up to five years. Car leases may be hard to get out of — make sure you understand what happens if you want to terminate early. Some leasing companies will allow you to transfer the contract.

Numbers of Miles – Most car leases limit you to 12,000 miles per year or less. If you go over this amount, it can be fairly costly; somewhere in the neighborhood of 10 to 25 cents for every mile over your limit. Many finance companies allow car leases to be structured to allow for extra miles (at a lower cost per mile than the overage fees), so make sure to ask for this upfront if you know you will be driving above the limit.

Wear and Tear – Lenders understand that it’s normal for a car to show some wear and tear after a couple years of driving. But only some — usually in an amount not to exceed $1,500. Don’t expect to drop off your car at the end of the lease term with a fender missing without paying for it. You are expected to keep the car in a good driving condition.

End of the Car Lease – Even though it may be a couple years away, you should learn what happens at the end of the car lease. In many programs, you have the option of purchasing the car for an amount that is pre-determined in your lease contract and is based on the depreciated amount of the vehicle, also known as the residual value. The higher the residual value, the more a car is worth at the end of a lease and, coincidentally, the lower the monthly payments during the lease.

However, the residual value in your car lease may not reflect the market value of your vehicle at the end of your term, so make sure to research what is the actual market value of your vehicle at that time. If you believe your car is worth less than the residual value, you can either turn the vehicle in or negotiate with the leasing company for a lower price.

Get a New Car Lease

So, if you're in the market to lease a car or truck, you're in luck. CarsDirect can process your lease by working with multiple banks and manufacturer programs to help get you the best deal possible. We also handle the majority of the paperwork, and the service is free, with no obligation required.