The Rules of Leasing a Carby Michael Ryan
When considering an auto lease, there are several things to consider beyond simply negotiating a great selling price. First, you must pay the bank for processing the lease. Then there are rules that determine how many miles you can drive the vehicle, how you must care for it, and what happens when your lease expires. Failure to observe these rules can result in additional fees when you return the vehicle.
All leases include an annual mileage restriction, normally ranging from 7,500 to 20,000 miles per year. Mileage restrictions are used to calculate the residual value of a vehicle. The residual value is what the car is worth at the end of your lease. The higher the residual value, the lower your monthly payment. If you exceed your mileage limit, you will pay a fee for each additional mile, typically around 10 to 15 cents per mile.
Once a leased vehicle is returned to the dealership, it will be inspected for excess wear-and-tear. Leasing companies expect their vehicles to be returned in excellent shape, and you will be billed for any excess damage.
When signing a lease, bank fees ranging from $300 to $1,200 are due. You must pay these "acquisition fees" in order to take delivery of a leased vehicle.
If you return a leased vehicle without leasing or financing another car of the same make, you will owe a disposition fee ranging from $300 to $600.
In addition to the monthly lease payment, there are other fees associated with a vehicle lease. In most cases, the bank fees and excess mileage can be prepaid in cash or rolled into your monthly payments. However, a lease is a great option for lower-mileage drivers with good credit histories, and your monthly payments can be substantially lower than if you purchase the vehicle.
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