It’s hard to decide which is the best among the various car leasing deals advertised by manufacturers. Each person has their particular situation, so renting a vehicle may or may not be right for them. There are many factors to consider, such as:
How long is better? Car leases are typically offered for 24, 36, or 48 months. Since new vehicles depreciate the most in the first two years, the 24-month lease will be the most expensive. The lease rate is calculated by the historical depreciation rate for a particular make and model, less any dealer rebates and manufacturer discounts. Therefore, a low-depreciation vehicle will have the lowest lease rates, since the dealer knows it will have a high resale value at the end of the lease. Most manufacturers offer a comprehensive 36-month warranty, so it’s not a good idea to lease a car for longer as major components start to wear out during the fourth year.
Credit rating. Since a car rental is offered with little or no money up front, an applicant’s credit history becomes more critical. If it raises any red flags, they may have to pay higher fees or be denied outright. It will be difficult to get out of the lease if the tenant cannot keep up with the payments.
Mileage allowed. Most leases specify twelve thousand miles a year, with additional charges for more than that. The contract specifies that the vehicle will not be driven on rough unpaved roads, will not exceed the mileage limit, and will be returned in good operating condition with only minor wear. If fuel economy is a concern, it may be best to lease an economy car for three years and then see what’s on the market. There will be more hybrid and electric cars available.
Insurance. An auto insurance policy should cover any minor accidents, but if the vehicle is destroyed, it may not cover what is still owed on the lease, so additional coverage may be needed.
Leasing a vehicle may not be for everyone, but it could be the right move for you.