• Main Menu
    • Home Page
    • Secure Area
    • File a Claim
    • Make a Payment
    • Refer a Friend
    • Join our Newsletter
    • Important Links
    • Insurance Glossary
    • View our Blog
    • Location(s)
    • Employee Directory
    • Contact Us
    • Extra Page 1
    • About Us
    • Privacy Policy
  • Automobile
    • Automobile Insurance Home
    • Auto Insurance Quote
    • Request ID Card for Auto Policy
    • Request Declaration and Coverages Page for Auto Policy
    • Send Declaration and Coverages Information to Lien Holder
    • Add Vehicle to Existing Auto Policy
    • Remove Vehicle from Existing Auto Policy
    • Add Driver to Existing Auto Policy
    • Remove Driver from Existing Auto Policy
    • Mechanical Breakdown
  • Homeowners
    • Homeowners Insurance Home
    • Homeowners Insurance Quote
    • Request Declaration and Coverages for Existing Homeowners Insurance Coverage
  • Renters
    • Renters Insurance Home
    • Renters Insurance Quote
    • Request Declaration and Coverages Page for Existing Renters Insurance Coverage
  • Motorcycle
    • Motorcycle Insurance Home
    • Motorcycle Insurance Quote
    • Request ID Card for Motorcycle Policy
    • Request Declaration and Coverages Page for Motorcycle Policy
    • Add Motorcycle to Existing Policy
    • Remove Motorcycle from Existing Policy
    • Add Driver to Existing Motorcycle Policy
    • Remove Driver from Existing Motorcycle Policy
  • Business & Commercial
    • Business & Commercial Insurance Home
    • Commercial Auto Insurance Quote
    • Request ID Card for Commercial Auto Policy
    • Request Declaration and Coverages Page for Commercial Auto Policy
    • Add Vehicle to Existing Commercial Auto Policy
    • Remove Vehicle from Existing Commercial Auto Policy
    • Add Driver to Existing Commercial Auto Policy
    • Remove Driver from Existing Commercial Auto Policy
    • General Liability Quote Form
    • Business Owners (BOP) Quote Form
    • Workers Compensation Quote
  • Health
    • Health Insurance Home
    • Health Insurance Quote
    • Disability Insurance Quote
    • Long Term Care Insurance Quote
  • Recreational Vehicle
    • Recreational Vehicle Insurance Home
    • Recreational Vehicle Insurance Quote
    • Request ID Card for Recreational Vehicle Policy
    • Request Declaration and Coverages Page for Recreational Vehicle Policy
    • Add Recreational Vehicle to Existing Policy
    • Remove Recreational Vehicle from Existing Policy
    • Add Driver to Existing Recreational Vehicle Policy
    • Remove Driver from Existing Recreational Vehicle Policy
  • Life
    • Life Insurance Home
    • Life Insurance Quote
    • Term Life Insurance Quote
  • Earthquake
    • Earthquake Insurance Home
    • Earthquake Quote
    • Request Declaration and Coverages Page for Existing Earthquake Insurance
  • Locations
  • Video Library
    • Auto Insurance Videos
    • Homeowner's Insurance Videos
    • Mercury Insurance Videos
Auto Homeowners Umbrella Earthquake Commercial
Home > Blog > Planning to lease a car? Understand the basics of the process
THURSDAY, MARCH 8, 2018

Planning to lease a car? Understand the basics of the process

Planning to lease a car? Before you choose a lease, be sure you understand car leasing tips
the basics of the process so you can go to a car dealership armed with knowledge. 

When you're ready for a new car, leasing can be an affordable way to get into a brand new model with slightly lower risk. Before you choose a lease, however, be sure you understand the basics of the process so you can go to a car dealership armed with knowledge.

What Leasing Really Means

Leasing a car could be more clearly described as long-term car rental. You pay a monthly price that allows you to “borrow" a brand new car for an extended period of time—typically around 36 months, though this number will vary based on your dealership. At the end of your lease, you will have the choice to either buy your car, for an amount specified in your lease agreement, or turn the vehicle in.

But, like renting, there are some restrictions.

Leases typically include the following:

    When you lease a new car, you get to take advantage of warranties and protections that are offered by the manufacturer. Some dealerships also offer some great added value programs that are only available when you drive off in a new car.

    Keep in mind that while you are making monthly payments, you do not own the car, so any damage you do to the vehicle during the term of the lease will most likely come out of your pocket when the lease expires.

    Before Visiting the Dealership

    The process for leasing a car is not much different from financing a car purchase. Here are a few steps to take before you step foot in a dealership.

    Research Lease Specials in Your Area 

    Car manufacturers often offer lease or purchase specials, especially as they close in on the end of a year and need to make room for the next year's models.

    Visit specific dealerships in your area. Set your search for a specific mile radius and see how their offers compare. While one dealer may offer a manufacturer special, another may not. You can also use Edmunds' Price Promise tool to research deals in your area.

    Figure Out What You Can Afford

    You can do this on your own, or use an online tool on a car manufacturer website or other vehicle-related authority. No matter where you do the calculations, be sure you're firm on what you can pay per month.

    Know Your FICO Score

    Many lease specials are only for customers whose credit scores are in the highest tier. Their good credit history makes them a lower risk, and they are rewarded with a better deal.

    If your score isn't stellar, there are still some negotiable points that can help you walk off with a lower monthly payment:

      You can access a free copy of your credit report via any of the three major credit bureaus, but you might need to pay extra for your credit score.

      Assess Your Trade-In Value

      If you plan to trade in your vehicle, it's a good idea to know how much it's really worth. Services and retailers such as Carmax offer vehicle appraisals (often for free) and can give you a very accurate assessment of what your trade-in is worth.

      Take this information with you, and don't tell the dealership you have it. When the discussion of your trade-in comes up, if they are offering you less than what you were appraised for, show them the appraisal document and ask them to match it.

      Some dealerships will do this, some won't, but it's worth taking an extra hour out of your day to know what your car is worth.

      Utilize Dealership Websites

      Today, most dealerships offer the best deals when you ask for a price quote on their website. This is a safe and easy way to start your negotiations without any of the stress or pressure of a face-to-face sales conversation.

      You can also communicate with multiple dealerships at once to compare offers and vehicles to narrow down which one will offer you the best price. And as stated above, Edmunds' Price Promise tool can help you receive quotes for the vehicle of your choice.

      How to Lease a Vehicle

      Once you've done your homework and are ready to visit the dealership, follow these steps to get the best bang for your buck and drive off the lot with the perfect ride for you.

      Ask About the “Money Factor"

      Car leases do not include an annual percentage rate (APR) like car purchases do, but they include what's called a “money factor." This is a very small number that functions much like an APR. It is presented as a decimaland is very rarely written out in your lease agreement.

      If you want to know what you're paying each month, ask the salesperson for your money factor, then multiply that number by 2400.

      Review Your Lease Before You Sign

      Once you've negotiated the price you want, either via e-mail or in person, review all the paperworkbefore you sign anything. Make sure you understand what you're signing, as there is no turning back if you change your mind.

      Also, be sure you clearly understand what will happen if you terminate your lease early.

      Understanding Lease Details & Terms

      Drive-Off Fees

      If you have an outstanding credit score, and you find a great deal on a lease that offers you an exceptionally low monthly payment, you probably won't need to put any money down. But there is another cost built in: lease drive-off fees.

      Technically not a down payment, a lease drive-off fee is a deposit you may be asked to pay up front that includes your first month's payment. If you have a trade-in vehicle, this will help off set this cost.

      Insurance Protection

      In addition, be sure your lease includes gap insurance. This coverage will protect you from the responsibility of paying the dealership on the value of the car if it is stolen or totaled in an accident.

      Warranties & Rebates

      Finally, as with buying a car, review all the warranties, rebates, and coverage offered on your new leased vehicle. Make sure you understand what “bumper-to-bumper coverage" really means and how long your coverage will last. Be sure to read up on the definitions and limitations of new car manufacturer warranties before you sign.

      MOST IMPORTANTLY—before you walk away, you need to understand:

        Make sure your dealer or salesperson is able to answer all of these questions in order to match you up with the perfect lease for your needs.

         

        This article originally published on DMV.org

        Posted 11:00 AM

        Tags: planning to lease a car? understand the basics of the process
        Share |


        No Comments


        Post a Comment
        Required
        Required (Not Displayed)
        Required


        All comments are moderated and stripped of HTML.

        NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
        Blog Archive
        • 2019
        • 2018
        • 2017
        • 2016
        • 2015
        • 2014
        • 2010

        • 5 tips to protect your possessions with valuable items insurance coverage(3)
        • spring driving tips(3)
        • john o'leary monday motivation: would you do it again?(2)
        • preventing slips and falls in your home(2)
        • crime spikes on halloween: fictional ghost story or factual concern?(2)
        • 3 easy ways to get rid of fruit flies(2)
        • why 2 experts say you should clean your medicine cabinet — and their 5 key tips(2)
        • john o'leary monday motivation: what do you see?(2)
        • help keep your teens safe behind the wheel(2)
        • 10 best places to get a deal on glasses(2)
        • motivational monday(2)
        • things burglars look for before breaking into a home (and what keeps them away)(2)
        • grilling safety tips(2)
        • ez-prep (severe weather: emergency preparedness and response planning)(1)
        • false facts you believe about money(1)
        • motivational monday with john o'leary: how heroes are made(1)
        • home safety tips(1)
        • john o'leary monday motivation: leave it all behind(1)
        • the flu is a bad souvenir. here’s how a pilot stays healthy while flying(1)
        • are you protecting your family from harmful uv rays?(1)
        • why you might want to wrap your car key fob in foil(1)
        • 10 smartphone camera features that make you feel like a professional photographer(1)
        • life insurance misconceptions(1)
        • should you pay off your mortgage?(1)
        • 19 discounts seniors didn’t know they could get(1)
        • 10 simple & sustainable tips for a healthier you in 2019(1)
        • confessions of a car salesman(1)
        • 6 simple spring car care tips(1)
        • car cleaning tricks that your body shop won’t tell you about(1)
        • drinking coffee won't improve your metabolism — here's what actually works(1)
        • ridiculously simple and free ways to live a more sustainable lifestyle(1)
        • financial book clubs make learning about money more social(1)
        • 6 ways to secure your home when you're away(1)
        • monday motivation with john o’leary: a small act of caring(1)
        • family fire safety tips(1)
        • 9 healthy holiday-eating strategies(1)
        • monday motivation with john o'leary: will you see it?(1)
        • how times of trouble remind us to be grateful “if the only prayer you ever say in your entire life is thank you(1)
        • tips to keep your house plants happy and healthy(1)
        • small money moves to change your financial future(1)
        • john o’leary motivation: it’s not about you(1)
        • always bloated(1)
        • 15 times you should definitely be washing your hands and aren’t(1)
        • john o'leary monday motivation: redefining perfect(1)
        • john o'leary monday motivation: slow down and enjoy life(1)
        • john o'leary monday motivation: where do i belong(1)
        • what to do when you're hacked(1)
        • 20 ways to save money(1)
        • focus on safety all year long(1)
        • power outages(1)

        View Mobile Version
        QUICK LINKS

        Home
        About
        Get a Quote
        Contact

        Refer a Friend Leave A Review
                                  R.L. Thomas Insurance Service, Inc.

                                      21021Ventura Blvd., Suite 215                         
                                      Woodland Hills, CA  91364                    
                                      Phone: (818) 380-1700                            
                                      Fax: (818) 906-0667                                
                     

                                       License#: 0601754
        Powered by Insurance Website Builder