Car leasing payments are based on a variety of bank-determined information, such as the car's expected depreciation over the lease term and payment interest rate. Each leasing bank sets it own rules, leasing provisions and fees. Before pursuing a lease, review your leasing bank's contract to determine its rules and requirements.
Lease Payment Determination
The bank you lease from ultimately defines the rules for your lease. A lease payment is based on the cost of the vehicle and its expected depreciation over the leasing term, which stays out of your payment. The car's depreciation cost, or the amount you pay for during the lease, is based on the term and mileage you choose. Once your lease contract is over, you can purchase the vehicle for the amount stated in your contract.
Options You Can Change
Lease-advertised mileage, term and down payment are adjustable. Manufacturers advertise a best-case scenario, which is based on certain leasing options that ultimately result in a low monthly payment. Leasing can be flexible; you can choose a term of 24 to 60 months and change the mileage allowance from 10,000 up to 18,000 miles per year. You can also change your down payment amount. Changing leasing terms affects your payment, as increased mileage or less of a down payment results in a higher payment.
Insurance
Leasing banks require increased insurance coverage. The bank likely requires you to keep a full coverage insurance policy in effect during the lease term, which includes coverage to your vehicle in the event of an at-fault accident. The bank can also require that you purchase a gap insurance policy, which covers your loan balance if your insurance company's determined market value does not. Many banks also require higher bodily injury and property damage limits along with a lower deductible, all of which increase insurance cost.
Fees
The rules for your lease are outlined in the bank contract. Over mileage fees, which can cost up to 18 cents per mile over your allowance, are stated in your contract. The bank's rules for wear and tear charges are also listed. Fees might also apply if you transfer your lease to another party. Read your contract over to assess early termination charges, lease purchase price, insurance requirements and penalties. Read your paperwork over thoroughly before signing and keep your contract in a safe place in case any issues arise in the future.
0 comments:
Post a Comment