Auto leasing school -> Car leasing 101 -> Leasing a car

Leasing a Car Continued...

So where do you start before you lease a car? Right here...education and knowledge.

We’ll guide you through all that you need to know about leasing, and help you determine if leasing is right for you. For some people, leasing is an excellent option. But for others, it is not.

While your lease payments per month for a set period of time seems appealing for some, many also need to consider the taxes and fees and commitment a lease also offers. But for now, simply grasp that leasing a car, truck, SUV, etc. is simply another method of paying for a vehicle, on loan essentially, for an established term. This may sound similar to renting, however it is far different. We’ll get into the differences of renting versus leasing later.

The Meaning of a Lease

When you sign a lease (lease agreement), means that you agree to pay $X per month, for a set period of time (term), and agree to pay all other vehicle leasing fees as insurance, taxes, licensing, etc. The lease makes you liable to follow the details of the lease through the term of the lease agreement.

A typical lease agreement can range from 24 months, 36 months or 48 months. While the lease term of 2 to 4 years seems like a long commitment than most relationships, just remember there are options to end the lease early.

Almost all lease agreements outline a penalty fee for returning the car lease early. This penalty fee can be expensive, however, other alternatives to get out of the lease are available, such as a lease assumption that may allow you to transfer the title of the lease to someone else.

Why would someone else want to take over a lease? We’ll get into those details shortly, but for now, simply take away that there are a number of benefits of taking over a lease for the remainder of the term (known as a short term lease). For example, the individual is committing themselves for a shorter time or term than the original leassor, and may benefit from lesser monthly payments due to any down payments the original lessor may have paid at the beginning of the lease term. Again, we’ll get into the benefits of taking over a car lease very soon.

Key points of auto easing

• pay set monthly payments for a set period of time
• your obligation is for 24, 36 or 48 months (unless you take over someone else’s lease)
• pay taxes, licensing, insurance fees, etc. (just as with any vehicle financing)
• leasing allows you to get into a more luxury vehicle for less than paying for it if you had purchased the car outright
• at the end of your lease, you return it to the dealer or leasing company
• you may have the option to buy-out the lease at the end of the lease term
• you may have options to break a lease early via a lease transfer
• leasing a car has many advantages over buying, but leasing is not for everyone
  

Why lease a car?