Three Booby Traps to Avoid When You Lease a Car
These days, more and more car shoppers are leasing their vehicles instead of buying new cars. Leasing can be a great option for a lot of consumers, because it generally provides them with lower monthly payments, low or no down payments, and the ability to drive a new or like-new car more frequently. While it could certainly be the right option for you, there are some important booby traps to watch out for before going into the dealership to lease your new car. Here are three you’ll want to avoid.
1. Owing the Bank for Damage and Excess Mileage
When you take the car back to the dealership at the end of your lease period, it’s important to know there will be an assessment for damages and to make sure that you didn’t go over your mileage limit for the lease. Even if you’ve done your part, there’s something you need to watch out for.
Your leased car can stay on the lot for months after you’re done with it before the banks gets around to picking it up. During that time, many people may have driven it—possibly damaging it and going over your mileage limit. Make sure to take pictures of the car and the mileage before you hand it in.
2. Large Down Payment and Short Term on the Lease
Sometimes a dealership will put a large down payment on a short lease term. When they do this, it’s often located in the fine print, so you might not realize what you’re going to have to put down up front. Most leases are good for 24, 36, or 48 months. Essentially, the down payment is being put toward your future monthly payments to provide you with low or even no monthly payments. There’s nothing wrong with this—it’s just something to be aware of.
3. A Mileage Allowance That’s Too Low
Virtually all vehicle leases come with mileage limits, meaning you’re only allowed to drive so many miles per year of your lease. Sometimes a dealership will quote you a lower price or rate for your lease but significantly decrease the number of miles you’re allowed to drive the car in a year. If you plan on racking up miles on your car, be sure that your lease contract gives you the ability to do so.