For many folks, getting a car lease makes perfect sense. Paying small monthly repayments is easier to manage than financing a brand-new set of wheels as it requires a hefty upfront deposit. If you don’t mind returning the vehicle at the end of the lease term, and prefer to drive new models every three to four years, then leasing is a smart option.
However, you should also be aware of the disadvantages of leasing a car. You may get limited mileage, pay high fees if you damage your vehicle, just to mention a few. Now, if you want to save money and get the most out of your car lease, here are several ways you can do it.
Do extensive research.
Go online and find a financing company that can give you the best deal. Make a list and write them down so you can easily compare the costs.
Don’t be afraid to negotiate.
While you are opting to lease a vehicle, approach it as if you were going to buy it. Once you get a price that is suitable for you, then you should mention leasing. So, don’t hesitate to explore your options.
Bring down the money factor.
The money factor is a number that many lessors use to determine how much interest will be included in your monthly payment. So, do your best to bring that number down to avoid paying a higher monthly rate.
Know how much driving you will do.
If you think that you will go over the mileage limit in your lease terms, then consider buying additional miles straight away. If you don’t exceed your limits and still have some miles left, it’s likely you are entitled to have a refund.
Minimise your monthly payments.
If you want to have lower monthly payments, you can increase your initial down payment. In case you decide to buy the car at the end of your lease, your purchase option cost may also decrease by making a higher upfront deposit.
Choose vehicles that have a higher value than others.
Lease cars don’t depreciate as fast as others do. You can research and compare models that last longer than other vehicles to reduce the cost of your monthly payments.
Be aware of your vehicle warranty.
Make sure that your lease term is covered by the car warranty. One of the advantages of leasing a new set of wheels is you don’t need to worry about repair costs. So, avoid leases that go over your vehicle’s factory warranty.
Make sure you have GAP insurance.
If it’s not already included in your lease, make sure you have Guaranteed Auto Protection (GAP). In case your vehicle is stolen or gets totally wrecked in an accident, you can protect yourself with GAP insurance despite the fact that the rate have increased. Better to be safe than sorry.
Be aware of any charges at the end of your lease.
Ask the dealer if there are any conditions or fees you need to pay or follow at the end of your lease term. Make sure these policies are fair and clearly explained to you.
Take advantage of tax benefits.
If you are using your leased vehicle for your company or business, you can write off your lease expense as a tax deduction. Also, you don’t have to pay taxes on the full cost of your car, even if it’s just for personal use. You can easily save a few hundred dollars instead of buying a vehicle and paying taxes for the full cost.
While leasing is not for everyone, it can be beneficial for those who are more interested in driving new models every few years and don’t want to make high monthly payments.
So, before you enter into an agreement, make sure you cover all your bases and have a complete understanding of how you can take full advantage leasing a car.
Over to you. What tips do you have for saving money on your car lease? We’d love to know. Kindly share it in the comments below.