There are many factors to consider when deciding whether to lease or purchase your next car. It’s important to understand the terminology and the process.
Most lease car options Adelaide have a mileage limit, usually between 10,000-15,000 miles per year. You’ll be charged a fee for each extra mile if you drive more than that amount.
- No Down Payment
Car leasing can make sense if you want to drive a new vehicle but don’t have the financial means to buy one. Unlike buying, which requires you to pay off your loan over time, most leases involve a short-term commitment that you can return at the end of the term.
Many dealers offer a lease with no down payment or “cap cost reduction,” which offsets the car’s total value that your payments will cover over the life of your lease. However, you should still budget for upfront costs like a security deposit and the first month’s payment. You may also have to pay registration, title and documentation fees, plus taxes.
Some cars are more expensive than others, and if you choose to lease a luxury model, you could be responsible for a large down payment. If this is a concern for you, consider looking at used vehicles that are comparable to the new ones you would like to lease. You can often find models that are similar in size, quality and features for less than the price of a brand-new car. Also, remember that leasing doesn’t give you equity in a vehicle like purchasing does, and it can be difficult to turn your lease in for another car later on.
- Lower Monthly Payments
A car lease typically comes with lower monthly payments than a conventional auto loan. However, this is not a guarantee and depends on the vehicle’s value retention and the mileage limits on the agreement. A good rule of thumb is to compare the advertised car lease prices on manufacturer websites with quotes from dealers. It will help you spot any extra charges that may not be included in the advertised price, such as a $5,000 upfront charge for excess wear and tear.
Also, be aware that some leasing companies use “fake residual values” to entice people to sign up for a lease. Research the history of a particular car model and its value retention to understand how a residual value is calculated.
Most lease car options Adelaide also have a yearly mileage limit of 10,000 to 12,000 miles. Driving more than that can result in costly penalties, as it lowers the trade-in or resale value of the vehicle. You can ask for a higher mileage limit, but this will increase your monthly payments.
It’s also worth considering how the mileage limitations of a lease might affect your insurance premium, which is often higher with leased cars than purchased vehicles. This might be a big concern if you have a long commute or frequently travel for business.
- Get a New Car Every Few Years
When you lease a vehicle, you get to enjoy the feeling of driving a new car every couple of years. You also benefit from having a vehicle covered by the factory warranty, saving you money on repair bills and maintenance. Depending on your lifestyle, you may want to lease a vehicle with the latest technological advances and safety features.
One downside to leasing a vehicle is that you don’t build any equity in it. It is because the vehicle depreciates so fast in the first few years after it leaves the dealer. However, at the end of your lease, you have the option to return the car, purchase it for a set amount or trade it in.
It’s important to remember that any mileage that you exceed will reduce the vehicle’s value when it comes time to trade in or sell. For this reason, most leases limit the number of miles that you can drive each year.
- You Can Trade in
If you’re looking at lease car options Adelaide and want to upgrade to another car at lease end, you may be able to trade in your current vehicle. To do so, you must have equity in the vehicle and be willing to negotiate. To determine whether your car has any equity, check the residual value in your lease contract or contact your leasing company. Then, compare that number with the current book value of your car as shown on a pricing website such as TrueCar or Edmunds or by checking local car ads for vehicles like your year and model.
