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How Does Leasing a Car Work – Top Ten Car Lease FAQs

how does leasing a car work

What is an Auto Lease? Vehicle Leasing 101

Are you looking for answers about what is car leasing? or how does leasing a vehicle work, then you’re in good company. Some of us may not be familiar with all the benefits of leasing a car. In fact, there are a good number of auto leasing alternatives available these days.

In the most basic terms, vehicle leasing is the rental of a car, truck, SUV, minivan, sports car, or electric car for a fixed period of time. Automotive dealerships offer vehicle leasing as an another option to traditional auto purchase or financing. It is often used by businesses when acquiring a company vehicle. In general, leasing a car costs less than buying, although there are several restrictions, such as mileage limits and non-customization agreements, that can determine whether it is better to buy or lease a vehicle.

Today we are going to look at our ten most commonly asked questions regarding vehicle leasing.

  1. Is Leasing a Car a Good Idea?

  2. There are many benefits of leasing a car that you just can’t get with other auto financing offers. These benefits include maintenance provisions, not needing to trade-in or sell an old vehicle, and lower payments. For more details on the benefits of car leasing, our car finance department is on hand to answer all of your questions.

  3. Is It Better to Lease or Buy a Car?

  4. Deciding whether to lease or buy depends on many factors. If you drive a lot of miles annual and like to keep your vehicles for longer than three years, leasing won’t be very beneficial for you. However, if you like getting a new car, truck, or SUV every two to three years and have no interest in the trade-in/selling process of your current vehicle, you could be a prime candidate for an automotive lease. Basically, the difference between auto leasing or buying really comes down to your personal, automotive and financial priorities.

    Also, it is worth mentioning that some owners find high mileage leasing to be more beneficial in terms of financial safety and security than vehicle ownership. Statistically speaking, despite the overage fees you may pay when returning a high mileage leased vehicle, it is likely that you will come out ahead, compared to buying a car. High mileage causes a significant reduction at resale, but with leasing, it’s already taken in to consideration. Additionally, the more time you spend on the roads, the more susceptible to accidents you will be. Therefore, if or when that accident occurs on your own vehicle, you would receive wreck history on CarFax, as well as a resale/trade-in deduction for vehicle damage. With leasing, you are not responsible for the deduction in value from that accident.

  5. Is There Such a Thing as Used Car Leasing?

  6. Yes, you actually can lease a used car. This type of ‘used car leasing’ is a little known ‘secret’ among car dealers but most dealers do offer Certified Pre-Owned leasing specials on CPO vehicles less than four (4) years old and with fewer than 48,000 miles on the odometer.

  7. What Does It Cost to Lease a Car?

  8. Are you wondering how much it costs to lease a car? Well, the truth is that it’s negotiable. Most dealerships and manufacturers offer zero-down lease offers. Like any financial product there are varying factors that qualify or disqualify customers from these types of leases. Factors like credit scores, credit payment history, etc. Just keep in mind that paying zero down typically means bigger monthly payments. Vehicle leasing, like traditional auto financing, works like this: the more you put down, the less you pay monthly

  9. May I Purchase the Car I am Leasing?

  10. The majority of auto leasing contracts have buy-out clauses in them in the event that you fall in love with your car and would like to finance it. Please note that the purchase price of the vehicle may vary. This depends on the vehicle’s residual value when the lease agreement has expired. There are also options to purchase your leased car prior to the completion of the contract. For this, however, you must speak with a financing manager. Only they can provide this exact info and take care of any early termination fees that may apply.

  11. Can One Get a Deposit Back From Car Leasing?

  12. Generally a deposit is refundable at the termination of a lease. At least this is true when all leasing contract requirements have been met. Keep in mind that a deposit (a.k.a. a security deposit) is not the exact same thing as a down payment. Down payments are not refundable but security deposits typically are. Also note that some leases require non-refundable deposits. Be sure to read your lease agreement carefully and ask questions before you sign on the dotted line.

  13. Is It Possible to Lease a Car with Bad Credit & 0 Down?

  14. While it is not impossible, it is difficult to lease a vehicle if you have a poor credit rating and no money for a down payment. Most zero-down lease offers require a healthy credit rating. But don’t worry, there are plenty of options available for car shoppers with less-than-stellar credit scores. To explore your leasing options, simply contact our financing team.

  15. What Credit Score Do I Need To Lease a Car?

  16. In general, credit score lower than 619 is classified as “subprime”. While this type of credit won’t typically be automatically declined, a 619 or lower credit score means you will typically have to pay a higher interest rate and/or down payment. There are a lot of steps you can take to improve your credit score like apply for too many loans, employment history, and consistent on-time payments.

  17. Can I Turn In My Leased Vehicle To A Different Dealer?

  18. Typically speaking, yes, you can trade in your leased vehicle at a different dealership. It must, however, be an authorized dealership for the vehicle manufacturer. It’s probably obvious, but you can’t turn a leased car into any other brand of dealership. You can, however, turn your leased MINI into any authorized MINI dealership across the nation. Again, assuming all your lease contract obligations have been fulfilled.

  19. Does A Car Lease Include Maintenance?

Of all the benefits of leasing a car, maintenance benefits are typically the most popular. Of course, specifics will vary within specific lease contracts, but most leases will cover normal wear-and-tear service and maintenance needs for your leased vehicle. These include fluid and filter changes, regular tune-ups, and regularly scheduled maintenance typically doesn’t cost anything out of pocket.

Contact a Car Leasing Expert Today

If you have more questions about vehicle leasing or our current offers, then contact us today. Our team of highly knowledgeable car leasing agents are standing by to respond to all your questions.

How to Get Approved for Car Leasing | MINI of El Paso

How Does Leasing a Car Work – Top Ten Car Lease FAQs | MINI of El Paso TX

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