What To Know About Leasing a Car (2023 Tips) – Pas Trusted News

Drivers who lease vehicles save an average of $115 per month compared to those who finance vehicle purchases, according to Experian’s Q4 2021 State of the Automotive Finance Market report.

However, your lease can be costly if you don’t read the fine print. Avoid these five common car leasing mistakes before you lease your next vehicle.

1. Not Negotiating How Much You’ll Pay For Your Leased Car

Every new vehicle comes with a manufacturer’s suggested retail price (MSRP). The MSRP is a suggestion of how much you should pay for a car purchase. You can negotiate the capitalized cost of your leased car, which is the overall amount you’ll pay to lease. This can result in a lower monthly payment or a lower down payment due at signing.

However, keep in mind that negotiation doesn’t work in all cases. Some leased cars already have a reduced price set by the manufacturer and the dealer.

In addition to the overall price, you should negotiate several other things before signing a contract. These include fees and the cost of add-ons like gap insurance. You can also discuss increasing the mileage cap for your leased vehicle to ensure you get the most value for what you’re paying.

2. Underestimating the Number of Miles You Plan to Drive

Negotiating the mileage in your lease contract can help you spend less money if you plan to hit the road a lot. According to the U.S. Department of Transportation, Americans drive an average of 13,476 miles per year. Most car leases include an annual mileage cap of 10,000 or 12,000 miles per year, below the national average.

If you think you may exceed the cap in your car lease, paying for more miles up front will be less expensive than the penalty you’ll pay when you turn your car in. Most dealers will refund you for any unused miles if you pay for extra mileage before signing your contract.

3. Not Purchasing the Right Car Insurance Coverage

In addition to your state’s car insurance requirements, lenders might require you to purchase gap insurance as a condition of your lease. Gap insurance pays for the difference between what you owe on your car and what your car is worth if it’s totaled in an accident or stolen.

If your dealership doesn’t require gap insurance, consider purchasing it as add-on coverage. Most dealers offer this auto insurance coverage, and it could save you thousands of dollars if you get in an accident.

4. Not Maintaining Your Leased Car

Taking care of your leased car will save you money in the long term when you return your vehicle to the dealership. Almost all car leases allow for normal wear and tear, like minor scratches and dirt on the upholstery. However, anything that can be considered excessive wear may cost you.

Keep up your regularly scheduled maintenance on your leased vehicle and repair any collision damage to avoid unnecessary costs. Also, making improvements to the vehicle without approval from your leasing company can cost you. The company could charge you to remove any modifications made to the car.

5. Keeping Your Leased Car for Too Long

Long-term car leases generally last more than two years, which means your vehicle’s new factory warranty could expire during your lease period. While warranties vary by manufacturer, most limited warranties last up to 3 years/36,000 miles.

Consider matching the leasing period to the length of your car’s factory warranty when negotiating the terms of your car lease. If this isn’t possible, you may want to purchase an extended warranty to cover unexpected repair costs.

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