Car leasing is a notable term when looking for a car, but there is no simple equation for the components of the process. There are many different types of leases available, so it is important to recognize the differences and similarities between each option. Here are the few different types of car leases:.
An Open-End lease is not common. It is used primarily by businesses or those who travel extremely frequently. Consumers should expect:
- Higher payments per month,
- Payment for depreciation if the car is under market value
- If the car does not depreciate, consumers may not need to pay additional fees
- Quicker depreciation due to excessive wear or mileage
- No mileage restrictions
This is the most common lease that consumers go for. At the end of the lease, they can “walk away.” It entails the usual:
- Good credit allows for the chance of lower monthly payments
- Agreeing to the fixed number of years lease contract states
- Keeping up with the required maintenance of the car
- Staying within predetermined mileage
- The car will be returned to the dealer at the end of the lease.
“Option to Buy” Lease
This leasing option, particularly for new car leases, gives you the option to purchase the car at the end of the lease. This is enticing for those looking to purchase vehicles in the future. Here are tips to utilize towards the end of this lease:
- When going over pricing, prices may be easily negotiable. This price should be listed in the contract before signing. Note if the negotiated price is higher or lower than the car’s market value.
- At the end of the lease, consumers can either pay cash to buy the car or finance the buyout price
- If one decides to finance, they should be sure to negotiate interest rates.
Single-Payment leases heavily rely on cash.
- You can pay the entire sum of the lease when you sign this lease. This helps get rid of monthly payments and can possibly help eliminate most of the monthly interests.
- Paying a large amount of money immediately can help consumers get a better deal on the purchase price.
- Finance rates will be lower
- The chances of getting approved for this lease is better
- With this lease, all the costs will be presented upfront, in the contract, so that purchasers can see all the fees and other costs.
Subvented leases are unique. These are available because automakers are striving to get their inventory moving, and this is offered by finance companies associated with a specific manufacturer. With this lease:
- It may only be available to those with great to excellent credit
- If individuals qualify, it can save them a lot of money
- Interest rates are lower
- Estimated depreciation is lower, which can lead to lower monthly payments.
If you come across any leasing questions, feel free to visit our Swapalease.com FAQ’s page for more information.