7 Questions to Ask Before You Lease a New Car
WLF Car Accident Lawyer Gives Advice
Leasing a car is not as straightforward as advertisements make them sound. Lease agreements differ from one company to another, so it is important to read every line of the agreement before signing it. Also, you mustn’t leave out the small print as they often hide important information.
Here are seven questions you should ask before leasing a car.
- What are the fees that I will be charged?
Normally, the fees you will be charged include the price, sales tax, registry costs and a documentation fee. There will also be a down payment, which can be waived if you ask. But there may be other hidden fees you may not know about until after you have signed the lease. The sooner you get to know about these hidden fees, the better you can avoid them. Also, negotiate the down payment. Although a bigger down payment means a lower monthly payment, you will ideally want to pay as little as possible. The reason is that the more you pay up front, the higher your loss will be if you damage the car shortly after leasing the car. In case you or your loved one is injured, talk to an experienced Bakersfield car accident lawyer immediately.
- What is the residual value of the car?
The residual value of a leased car is how much it will be worth at the end of the lease. It is an estimated figure set by the company and is expressed as a price (e.g., $25,000) or a percentage (e.g., 30 percent of the original price). The higher the residual value, the less will be your monthly payment. For example, if you lease a $45,000 car for two years and its residual value is $36,000, then you will use $9,000 of the car’s value. This means your monthly payment will be roughly $375 plus interest and tax. But if the residual value is $28,000, then you will pay $708 plus interest and tax per month. For this reason, you should always look for a car with a high residual value.
- How many miles does the lease include?
A lease allows you to drive a car only a certain number of miles. The industry standard is 12,000 miles per year; but your lease may include only 10,000 miles. Once you exceed the limit, the dealer may charge you 15-20 cents per mile. So rather than getting a nasty surprise at the end of the lease, ask the dealer how many miles the lease includes before signing the lease.
- Are there any special discounts?
Carmakers periodically offer special discounts to promote their slow selling models. These discounts can result in a substantial saving for you. So ask the dealer if there are any special discounts.
- What will be my ‘money factor’?
‘Money factor’ is the jargon for interest rate in the world of car leasing. It is usually based on your credit. But with so much competition in the market, dealers are willing to lower the interest rate if you ask them. When you ask what your interest rate is, they will give you an answer like, “The money factor is 0.00130.” Multiply that number by 2,400 and you will get your interest rate. In this case, it is 3 percent. The interest rate is one of the few things you can negotiate in a lease, so try to push it as low as you can.
- What is the duration of the warranty?
It the manufacturer’s warranty lasts the duration of your lease, then you will never have to pay for any major repair. Therefore, you should make sure that the manufacturer’s warranty covers the entire duration of your lease as well as the total number of miles you are likely to drive.
- Can I transfer the lease contract to another person?
Most leasing companies allow you to transfer the lease contract to another person in the middle of the contract. However, there may be some who won’t allow it. So ask your dealer if they will allow it before signing the contract. Otherwise, you will have a tough time if you want to change the car or exit the lease before its end.
One thing you must not forget is that that a leased car is not your car, so be careful and drive safely. If you or your loved one injured in an accident, then call a reliable car accident lawyer immediately to find out what you can do.
Our lawyers have decades of experience in providing excellent results in these areas of practice.