Leasing a vehicle is different from leasing an apartment. If you employ a leasing company to handle your properties or worked with one to handle real estate matters, your agent does not put forth any money to complete a home or rental contract. Leasing a car requires payment of a vehicle's total cost, so you'll have to use an auto leasing bank to take on the financial responsibility and risk.
How Leasing Works
When you lease a vehicle, you're actually leasing it from a bank, not a dealership. A bank purchases the car from the dealer, then leases the car to you. Your payments are based on expected depreciation determined by mileage and length of the lease term. Your monthly payments also include an interest rate. The leasing bank is the vehicle's titled owner and remains on the registration. Your full-coverage insurance, a requirement of leasing because of the risk of loss, lists the leasing bank as the loss-payee.
Lease Providers and Terms
If you know which vehicle you want to lease, you can go to the manufacturer's website to view monthly lease offers. You can review monthly payment amount, term, mileage allowance, down payment requirement and the name of the bank providing the lease. You'll have to lease the vehicle from a new car dealer. If you prefer, you can change the lease terms once you've found your car. Advertised lease payments are based on a best-case scenario showing a down payment, mileage allowance and term predetermined to show the lowest payment possible.
Obtaining a Lease Approval
You can apply to the manufacturer's bank online or use a dealership. The dealer, a go-between for the bank and your lease, electronically submits your lease application for approval. Once approved, the dealer provides all bank contracts and motor vehicle paperwork, following the bank's requirements for signatures and insurance requirements. Once you take the lease, the dealer submits your contracts to the bank and your paperwork to your state's motor vehicle office.
Considerations
Manufacturers usually change lease offers monthly, so if you like the leasing terms you find, check the offer expiration. You can also negotiate pricing to lower payments, as most leases are based on full sticker price. Dealers make full profit for a new car sale when the vehicle's price isn't negotiated, as the leasing bank then purchases the car for full price. Vehicle leases require good to excellent credit, so not everyone can obtain an approval. If you can't obtain an approval, you can use a cosigner, who joins the lease contract with you and is equally responsible for the payments.
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