Common Mistakes To Avoid While You’re Leasing A Car

Opting for a car lease can be a smart financial move, providing a budget-friendly alternative to buying a brand-new vehicle. With a lease, you can skip the hefty down payment, the hassle of long-term maintenance, and the headache of selling the car when ready to move on. However, before you jump into a lease agreement at a dealership, it's crucial to be aware of potential pitfalls. To help you navigate the leasing process like a pro, here are some common mistakes to steer clear of.

1. Not Negotiating The Price

Don't fall for the dealer's initial offer. It can be tempting to think that it's your only option, but that's far from the truth. Instead, focus on the actual purchase cost of the vehicle, known as the Gross Capitalized Cost (GCC) in the lease agreement.

Another crucial aspect is carefully reviewing the contract details. Dealer fees are often included in the overall cost of ownership, but not all of them are necessary. Take the time to identify which fees can be reduced or eliminated, as this will help lower your monthly payment. By doing so, you can ensure you're getting the best deal possible.

2. Not Taking The Mileage Of The Car Into Account

When entering into a lease agreement, it's important to be mindful of the mileage limit imposed. Typically, it ranges from 12,000 to 15,000 miles per year. Exceeding this limit can result in penalties charged for each additional mile you drive.

Before signing on the dotted line, take a moment to evaluate your driving habits. If you anticipate going over the mileage limit, inform the dealer and discuss your options. They may be willing to increase the mileage limit but keep in mind that it will come at an additional cost. You'll either have to pay a higher monthly fee to compensate for the extra miles or make an upfront payment for the excess mileage.

If you find yourself in the position of paying extra, it's essential to include a clause in the lease agreement that allows you to receive credit for unused miles. This way, if you end up not using all the allocated miles, you can potentially recoup some of the extra expenses incurred. Being proactive and negotiating these terms can save you from unexpected costs down the road.

Also Read: What Is Loan Settlement And How Does It Affect Your Credit Score? 

3. Not Reviewing The Car Model

When it comes to leasing a car, it's worth noting that many leases are arranged through brokers or online retailers. While this provides convenience, there is a downside to consider. Not being able to physically see the vehicle, especially if it's a model you haven't encountered before, means you might miss out on important details that could affect its suitability for you.

One common problem we often come across is customers who lease a vehicle without knowing its exact height. They only discover upon delivery that the ride height doesn't match their preferences. This can be quite disappointing and frustrating.

To avoid such situations, it's essential to do thorough research and gather as much information as possible about the vehicle you intend to lease. Take advantage of online resources, and customer reviews, and even reach out to the dealer or broker to clarify any uncertainties. While you may not have the opportunity to physically see the car before leasing it, being well-informed can help you make a more educated decision and choose a vehicle that aligns with your specific preferences and requirements.

4. Not Considering Your Credit Score

Your credit score can be influenced by various factors, such as credit card usage, outstanding debts, and significant purchases. These elements have the potential to negatively impact your credit score, which can subsequently pose challenges when it comes to leasing a car. Hence, it's crucial to take your credit score into account when assessing the financial implications of a new car lease.

Also Read: All You Need To Know About What Is A Credit Score 

5. Not Taking the Maintenance Of The Car Seriously

When leasing a car, it's important to remember that you're responsible for the same maintenance tasks as if you owned the vehicle. This includes routine maintenance such as oil changes, fluid checks, and tire rotations, as outlined in the manufacturer's recommendations. By staying on top of regular maintenance, you can avoid any potential penalties when returning the leased car. If you're unsure about the specific service requirements, refer to the owner's manual or consult the dealership from which you leased the vehicle. They can provide guidance and ensure you're meeting the necessary maintenance obligations.

6. Leasing The Car For Too Long

Leasing a car is typically intended as a one-time arrangement, but it's crucial to consider the duration of your lease. If you sign a lease for more than three years, it can potentially lead to complications. Most lease agreements include a warranty that offers coverage for a specified number of miles. However, as the lease extends beyond the warranty period, you may be responsible for maintenance and repairs that are not covered. If you're considering a lease term of four or five years, it's wise to explore the option of obtaining an extended warranty. This can help alleviate the additional costs associated with maintenance and repairs, providing peace of mind for a car that you don't own.

In Summary

Leasing a car can become regrettable if you're not well informed. Similar to purchasing a car, it's crucial to avoid any missteps before committing to a lease agreement. Take the time to carefully consider the terms of the contract, the anticipated maintenance costs, and other relevant factors. If you haven't established a budget yet, it's advisable to create one to assess how a lease will fit into your monthly expenses. Additionally, don't overlook the opportunity to explore if you can potentially lower your car insurance premiums through the leasing process. Being proactive and thorough in your considerations will help you make an informed decision and avoid any unwanted surprises along the way.