How A Lease Works

When it is time to purchase a new vehicle, many people consider either purchasing the vehicle or leasing it. But if you've never leased a vehicle before, it's hard to know if that is a good option for you. Here's a quick guide to leasing a vehicle.

First off, what is a lease? It is an agreement between you and a leasing company that allows you the right to drive a vehicle while you make monthly payments on it. A lease typically lasts 2-3 years, sometimes up to 5, after which time you return the vehicle to the leasing company and after paying your fees, you are free to shop for another car.

What types of car can I lease? Typically people who lease vehicles, choose to go with new cars because it gives you the biggest bang for your buck, especially since you don't have to pay off the full price of the vehicle.

Why do people lease cars? Most people choose to lease a new vehicle because it allows them to drive a brand new car, and that car is most likely still under warranty and less likely to give you problems. Then once you get tired of driving that vehicle, you can swap it out for something new again in a couple years and have the latest and greatest again.

What are the downsides to leasing a vehicle? Once you lease a car, you carry that lease until your term is up. That being said, you're basically stuck with a car for that time frame whether you like it or not. That's why it's always a good idea to do thorough research when purchasing your new vehicle whether it's a lease or you're choosing to purchase it. Also, when you turn in your lease, they will check out the tires and condition of the vehicle. If you have damage to the interior or exterior, worn tires, or anything substantial they'll need to fixed, you'll be charged for the repairs.

What is the process in leasing a vehicle? Typically when you lease a vehicle, you pay the up-front costs of the first month's payment, a security deposit, a down payment, taxes, registration and other fees. Once you've set up your lease, you are good to go! Then, each month you make your payment (which is usually lower than what a loan payment would be).

At the end of your term, whatever that may be, you return the car and pay any end-of-lease costs there may be. You can also choose to purchase the vehicle after your term is up, if you desire. And that is the short version to how an auto lease works! For more information and details catered specifically to you, contact Reedman-Toll Subaru!