Avoid 5 Mistakes When Leasing A Car

A car lease can be an effective way to provide you with a car to drive. Before you proceed with entering into this legal agreement, however, you should learn about the responsibilities and requirements of all parties to this transaction. Proceeding from an informed position should ensure that you have a successful agreement.

1. Down Payment

It's typical for lessees to have a down payment due with the initiation of a car lease. Generally, this down payment serves as an advance payment on the agreement. However, if an accident or theft occurs, the insurance company will pay proceeds to the leasing company to compensate them for the value of the car. You would not receive a reimbursement in this situation. Consequently, it's safer for you to place as small a down payment as possible on the automobile in the event of an accident or theft.

2. Insurance Considerations

In the situation of a theft or accident, you will still have the financial obligation to complete the terms of your car lease. You can protect yourself from this financial obligation by purchasing gap insurance. Gap insurance will cover the amount you still owe on the automobile, relieving you of this financial obligation. Some contracts may include gap insurance, but it's possible that you will need to supplement the policy with separate gap insurance to ensure that you have full protection.

3. Maximum Mileage Limits

Contracts usually include yearly maximum driving limits on mileage. If your mileage exceeds the contractual mileage limit, you may be charged an additional fee for each mile that you go over the limit. These mileage fees can result in significant additional charges at the conclusion of the agreement. To avoid these charges, know the typical number of miles you drive in a year and ensure that your agreement is in line with your typical driving habits. If necessary, request a higher mileage limit prior to entering a contract.

4. Required Maintenance

Your contract will probably stipulate required maintenance that will be your responsibility. This maintenance may include regular oil changes, minor repairs to the exterior of the vehicle, and other maintenance tasks such as replacing windshield wipers. Common contract language will specify "normal wear." Ensure that you understand your responsibilities prior to entering into the agreement.

5. Contract Term

The typical term for a car lease is two to four years, although some terms may be even longer. If your vehicle has a warranty period, avoid having the lease extend past the warranty. The reason for this is because it's common for problems and issues to begin occurring after the warranty period expires. If this happens, you will be responsible for paying for these issues while you continue to possess the vehicle. Another option would be to purchase an extended warranty that will cover vehicle expenses for the entire term of the contract.

Due diligence will enable you to proceed with a car lease that will provide you with an automobile that you can afford to drive.

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