What are the best car leasing options for your needs? In this blog post, we’ll tell you all you need to know about car leasing, the types of leasing deal there are and the particulars of each leasing model.
In recent times, there has been a trend going on with people who don’t fancy getting involved with monthly payments for a car they buy. Customers had been looking for an alternative that is cheaper in the long term and gives them the commodity of changing their car after a couple of years without having to go through the process of selling their used car. That’s when car dealerships around the country came up with the car leasing concept, a great idea that gives customers the deal they were looking for and a chance to keep changing car every couple of years without having to worry about spending too much money.
How Leasing Works
Let’s say you go to a dealership and pick out a car you like; you just tell the car dealer you are looking to lease it and they will give you the different types of leasing options you have at your disposal. You will most likely get a deal for a limited number of years where you’ll make monthly payments that are always lower than the ones you made when you bought a car, you also have to give a down payment for the car, but that is also way cheaper than when you purchase a car. A manufacturer warranty covers all vehicles that get leased by customers, extra cost for any repairing issue is usually not a problem. This leasing option will grant all customers the chance of changing their car every few years.
TYPES OF CAR LEASES
The Closed-End Type
This type of car lease may also be known as the “walk-away” lease, which is the most requested type of car lease. The main features of this deal include agreeing to a lease contract for a determined number of years. You also have to return the vehicle after the lease has concluded, you have to cover all the maintenance expenses although sometimes car maintenance is covered by the dealership. Finally, you have to keep the car below the agreed number of miles. If you go above the mileage previously approved, you might have to pay an extra charge for that. Customers with a good credit history usually go for this option because the monthly payments are low for them.
The Open-End Type
This kind of car lease isn’t as common as the first one we mentioned; business people who need to travel a lot in a car usually request the open-end lease. This type of car lease includes no mileage restriction; the monthly payments can be higher than the closed-end deal, you will also need to pay for depreciation of the car by the time the lease comes to an end if the price has gone below the market value. Also, the market value of the vehicle usually gets determined at the end of the lease contract. Most cars lose 15% of market value after three years of usage depending on the condition the car is in after a lease ends. If by the end of the contract the car doesn’t go below the established depreciation cost, you won’t have to pay any additional fees.
The Subvented Type
This type of car lease usually comes as an offer from finance companies that have a special arrangement with a manufacturer. These deals are usually given when manufacturers require moving parts and inventory at a faster pace, or for any particular car model that has low demand. These deals have low-interest rates; they are only offered to consumers with perfect credit history, these deals also have a small depreciation. There will be times when you may not find the car model you are looking for, but assuming you qualify, the subvented car lease deal will save you thousands of dollars.
The Single Payment Type
This car lease works better when you already pack a lot of money in cash and pay it up front with an intention to lease it rather than buying it. This is managed as a single payment, and the benefits of it are: you get rid of the monthly payments, you eliminate interests, the finance rate is remarkably lower, you could negotiate a lower purchase price if you decide to buy the car by the end of the lease term.
The ‘Option to Buy’ Type
There are some car dealerships that give the customer an option to buy the car by the end of the lease. If you choose to purchase the vehicle after the contract ends, you are going to have to make sure you choose this option on the contract when you first make the lease. You are also going to determine if the final price you will pay is higher or lower than the price on the market value is, select an option between paying cash or financing the purchase. You have to pick the best interest rate for your wallet. Always look at your options before you agree to anything.
Leasing Depending on the Type of Car
There are many types of cars you can lease; we’ll give you a guide in which you can determine which is the best car leasing option for your specific needs. We’ll tell you about price, the activities you can make with the type of car, and the kind of person who usually gets this type of car lease. Regardless of the kind of car you are renting, all deals are made for a 36-month period, have a 12,000-mile limit before taking it back to the dealership, and most of them need an initial down payment.
These are amongst the most affordable types of cars you can lease; they tend to have the most demand among customers in any dealership. Usually, blue-collar workers and students can be the ones more suited to lease this type of car.
- It’s perfect for driving around the city.
- Parents usually lease these cars for their student children.
- They don’t go over a $150 monthly rent.
- They don’t go over $200 monthly maintenance.
- Not very good for road trips.
- They don’t have a lot of space to fit things.
- They are not splendid for cross country.
One of the biggest utility vehicles on the market, the pick-up truck is usually perfect for farmers or people who tend to carry a lot of things in the back. Veterinarians who often carry animals will want to get these types of deals as well.
- Great for cross country.
- Perfect for carrying many types of things and animals in the back.
- They are ideal for trips to states, camping or beach trips.
- Not very affordable, some leases even go over the $400 barrier.
- These vehicles spend a lot of gas; they are not excellent for just cruising around town.
- They take up a lot of space, so if you are living in an apartment area, you might want to pick a different kind of car.
Crossover & SUV
These are the famous soccer mom type of vehicle, they are not very expensive but are perfect for carrying children around and taking them to school. This is the most requested type of model for families with a lot of children, they are great for cities, and some people even use them a lot for going to the beach or camping due to the big space they have.
- This is a great vehicle for traveling.
- Perfect for children.
- The price doesn’t go over $300.
- They are also really good in the cross country.
- They don’t have the wow factor well-put down.
- Most of them are expensive in gas.
- Not built for a bachelor.
- Price range of maintenance is mid range.
Luxury & Sports Cars
These are amongst the most expensive type of lease, but they are also among the most popular because there’s a lot of business people who prefer renting a luxury or sports car instead of buying it. Millionaires are way more keen on changing these types of cars every couple of years instead of just buying one they will have to pay constant maintenance for. This is a great option for professional athletes, for example, they are always looking to show off their different cars.
- They are ideal for presentation purposes in business meetings and stuff like that.
- Very durable and with a wide warranty.
- Their performance is usually high when it comes to luxury and speed.
- Usually amongst the highest prices in the market for both monthly rent and monthly maintenance.
- Most of them go over the $500 barrier of maintenance; they also go over the $400 barrier in monthly rent.
- Not really for families or children.
- Not a great addition for traveling.
Hybrid & Electric Cars
These type of cars are amongst the top trends of the 21st century, protecting the environment is one of the main concerns of many citizens in the world. In the United States, especially in California, having a leased Hybrid or electric car is something they are always keen on doing. These leases are very much on par with some of the SUV’s and even some luxury vehicles, but you trade a high contract price for a better environment and conscience. There is no specified demographic for these types of vehicles, they are being leased by everybody across the country. The main appeal of these cars is that the carbon emission they have is minuscule or none at all depending on the type you lease, this turns them into a perfect option for city cars.
- They are eco-friendly.
- They are perfect for students or people who travel relatively short distances.
- They are not above the $300 barrier in monthly rent.
- They are not above the $300 monthly maintenance rate.
- They don’t make any loud sounds when you drive them.
- These cars can’t travel long distances without needing a charger nearby.
- The designs of these cars are not very aerodynamic or ‘cool.’
- These cars are not splendid for going on road trips; they usually don’t have a lot of space.
- These cars weren’t made for speed performance tests.
These are only the most famous types of cars you can lease in your favorite car dealership, the truth is that any middle-class worker can afford any of these cars. The problem comes down to maintenance because not everyone can afford to maintain a luxury car on a daily basis, but just having the option to lease one is appealing. Renting a car is a new trend that doesn’t look like it will go away anytime soon, people seem to be getting more and more inclined to not spending insane amounts of money buying a car when they can use that money for other things like traveling.
But the deals are countless; you can choose from a wide variety of different types of cars or trucks. The best part of all this is that you will be able to change your car in a couple of years, this will grant you a certain sense of freedom when it comes to choosing a car for yourself or someone in your family. Another great reason why leasing a car is a big trend nowadays, is because a lot of people who always dreamed of having a luxurious sports car can fulfill their wildest fantasy. Many of these people who always had the wish to drive one of these cars, feel like their status grows when they are driving it. But it all comes down to what your preference is, what type of job you do, or the family size you have.
You need to know that leasing a car can be a good option for you if the main goal in your life is to save money and still enjoy the good things in life. If you had been struggling to make the decision between buying and leasing a car, hopefully, this article has helped you make a better decision.