Information On Car Leases, Car Lease Insurance, Bad Credit Car Lease And Auto Lease Finance
Car Leases - Every one has different vehicle needs and car leases are options to consider when getting a car.
When you lease a car, the dealer sells the car to the leasing company who leases you their car for 24, 36, 48 or more months. The leasing company can be an independent, the car dealer, or a car manufacturer like Ford Motor Credit.
Whether you choose to buy or lease your new car should depend on a number of factors. Please review the following tips before deciding to lease a car.
Car Leases Advantages:
Leases are attractive to many car buyers because they can get more car for a lower monthly payment.
Leasing allows consumers to always have a new or late-model car in the driveway.
Newer cars have the latest creature comforts such as an OnStar communication system, advanced stereo equipment or DVD entertainment systems.
When leasing, one of the advantages is that it normally requires less money down and will give you a lower payment than if you were to purchase the same vehicle.
There might be tax advantages for auto leasing if it is being used for business. It is best to check with your accountant to see if it would be to your advantage to lease.
when interest rates are low, lease payments aren't that much lower than financing. But "when rates start going up, leasing becomes more popular.
Leasing allows consumers to defer the purchasing decision while they're using the car.
Lessees also don't have to worry about owning a depreciating asset or dealing with hefty repair bills.
Lessees benefit from having the latest safety technology, such as side curtain-type airbags or an electronic stability system.
Leasing also reduces your initial cash outlay.
If you use your car for your job, leasing payments can be written off as a business expense on your tax returns.
Additionally, lease obligations don't show up as debt on a credit report, which may be important to companies that buy multiple cars for business use.
Car Leases Disadvantages:
Lessees are paying for two things in any lease deal: the car's depreciation and the cost of money.
Some consumers like the comfort of driving the same car for a number of years, maybe that's the reason more than 85 percent of consumers buy rather than lease.
Back to back leases cost you more in the long run. This is because you suffer 50% depreciation on a new leased car every 3 years. At lease end, bring the car back and buy it or lease another.
Getting out of a lease early can be very costly.
Bad Credit Car Leasing
Having a bad credit report and low FICO score often creates problems when leasing a car.
However, banks and finance companies have eased off a bit from a few years ago and are much more willing to do business with customers with poor credit histories.
Car manufacturers and dealers have become so competitive that they are willing to take some extra risks to get business that they might have turned down in the past.
Furthermore, credit repair has become somewhat easier than in the past.
Generally, these people should expect to be required to make higher down payments, or make a security deposit for leasing
There are varying degrees of bad credit. Some are seriously bad; some not so bad. Some problems can be quickly repaired; others take longer.
When you apply for a lease, your car dealer and finance company will request a credit history report and credit score from one or more of the three major credit reporting agencies:
Since car dealers and finance companies don't have time to read through credit histories in detail, they also ask for your FICO Score , which is a single number that summarizes your entire credit history.
Car Lease Insurance
If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage.
You'll need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.
Collision covers the damage to the car from an accident with another automobile or object.
Comprehensive covers a loss that is caused by something other than a collision with another car or object, such as a fire or theft or collision with a deer.
The car leasing company may also require "gap" insurance. This refers to the fact that if you have an accident and your leased car is damaged beyond repair or "totaled," there's likely to be a difference between the amount that you still owe the auto dealer and the check you'll get from your insurance company.
Car Leases Tips:
Do not lease if you are upside down on your current lease or loan.
Do not lease if you will need a different car soon.
Do not lease if you drive more than 12,000 miles a year.
Do not lease if you plan to move out of state. Most leasing companies don't want their cars leaving the state.
Do not lease if you mistreat cars.
Do not lease if you live in Illinois or Texas, because they tax you on the entire cap cost instead of pay as you go tax on monthly payments.
Do not lease if you want to customize your car, make modifications, paint it, or it.
Do not lease if you love owning your cars.
It is also important that you make sure that the mileage specified on the lease will cover the number of miles you intend to drive annually.
