How do lease vehicles work after you lease it for the term of lease do you give it back is it better to lease?

Question

I am thinking of leasing a vehicle and have never done that I know you give it back when the lease is up, but what else how does it work. I dont really want to purchase one. would it still be under warranty while you lease it

Answer 1

Leasing is just LONG TERM RENTAL.

You do NOT own the vehicle, but you are fully responsible.  The dealers love leasing.  You are under their contract (lease) and have more chances to s***w you for money.

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>> I dont really want to purchase one.

Why not?  If you can buy the car (always).

Good Luck...

P.S. Stick around and check out how many people have problems with leasing.

Answer 2

You have options at the end of a lease.  The purpose for most is to give the car back at the end of the lease since the motivation is to always be driving a new car.  "Some folks lease with the intention of buying their vehicle at the end of the lease, or before the end of the lease. This is nearly always more expensive than simply buying outright. However, you may have a good reason for this tactic. Just be aware that it costs you more in the long term."

Yes, the car will be under warranty whiile you drive it provided that the lease term doesn't extend the warranty term.

"So, which is better, lease or buy?

It depends on what's most important to you. All of us have different lifestyles and priorities — in cars and in finances. Car lease-versus-buy decisions must be made with your own lifestyle and priority attributes in mind. What's right for one person can be totally wrong for another.

LEASE - If you enjoy driving a new car every two or three years, want lower monthly payments, like having a car that has the latest safety features and is always under warranty, don't like trading and selling used cars, don't care about building ownership equity, have a stable predictable lifestyle, drive an average number of miles, properly maintain your cars, are willing to pay more over the long haul to get these benefits, and understand how leasing works, then you should lease.

BUY - If you don't mind higher monthly payments, prefer to build up trade-in or resale value (equity), like the idea of having ownership, like paying off your loan to be payment-free for a while, don't mind the unexpected cost of repairs after warranty has expired, drive more than average miles, prefer to drive your cars for years to spread out the cost, like to customize your cars, expect lifestyle changes in the near future, and don't like the risk of possible lease-end charges — then you should buy. "

Good luck

Answer 3

Leasing can be good for the right people.

Essentially, in a lease, you never "own" the car. You make payments for 2-3 years, then hand the car back. Think about it almost like a long-term rental.

If you purchase a car on a conventional 'buy' contract, but trade it off before you are done paying for it, you never *owned* that car either.  If you routingely trade out of cars every 2-3 yrs, you never *own* them at all.  You are just moving from one monthly payment to another.

Dealers make no more on a lease than they do on a purchase.  The cap cost of the car is the same as the 'buy' price.  A lease customer has no need to buy extended warranties or any other extras - in fact lease companie usually don't allow for them.  So we typically make LESS on a lease than a 'buy'.  The residual is set by the bank, not us.  When the car is handed in at the end of the lease, the dealer is just an agetn for the  bank.  We don't stand to gain anything on the residual, except hoping you buy another car in teh process.

There are some advantages to leasing under the right circumstances.

First, if you trade out of cars every 2-3 years, it might be right for you. In a lease, you have a contract for a fixed amount of time. I discourage leasing past 3yrs - 2 is better. In a 'loan', after 2 yrs, if you try to trade you will probably be upside down, and owe more than the car is worth. So, in order to get out of it, you have to have a lot of cash, or finance that negative on the next car.

The contract will tell you that your payments are $x per month plus tax. At the end of the term, you will have a residual value for the car. The lease company basically says "In three years, we feel this car will be worth $Y" You have the option to buy the car at the end of the lease for that amount. If you are in love with the car, or it is worth well above the residual, you may want to consider that. However, in most cases, you simply hand over the keys and walk away.

In a lease, there is a specified amount of mileage. Most leases are constructed around 12K or 15K miles per year. If you go over the mileage, there will be a per-mile penalty at the end of the lease. So, if you drive a lot, it may not be for you.

Leasing typically allows a person to get a nicer car for the same payment as a lower-end car on a loan. that is because of that residual. You are only "financing" the difference between sales price and residual. In a loan, you are financing the entire purchase price.

In other words, if a car has a sale price of $25,000. on a three year lease, lets say the residual is $12,500. You are only "financing" $12,500 for 3 yrs. If you were to buy that same car, you would finance $25,000 either for a longer term, or a much higher 36 month payment.

Lastly, in a lease you pay less sales tax. In a conventional purchase on that $25k car, you pay tax on the whole 25,000. In a lease, you pay sales tax on the monthly payment. In other words, your payment of $300/month is actually $300+sales tax. BUT you are only paying tax on the leased amount - in the earlier example you are only paying sales tax on $12,500.

To those who say "never lease" -- read this forum for 30 mintues. For every lease 'horror story' you read, you will see 20 people who are upside down on a 6 yr purchase and no way out. The key is to be thoroughly informed about the pros and cons of both, and make an educated decision based on your needs and lifestyle.

Times leasing is good: You trade cars ever few years, you dont drive more than 12-15k per year, you want to put less down

Times it is bad: You like to keep cars a long time, you drive a lot, you want to put a lot of cash down.

Hope that helped some

Answer 4

Leasing is good if you like a new car every few years. you pay for the part of the car you are actually using. But you have to think about how many miles you do drive a year. The miles can be a big factor because if  you go over the miles you will have to pay per mile what you are over. check the contract.

The great thing about leasing though is when the lease is up and you do have 3 options with a lot of makes you can turn it in, buy it or sell it yourself if the car is worth more than what the agreed purchase price is, and you would know that up front.

90% of people who trade in cars are upside down when they are ready for a new car when they have purchased them. You will be responsible for any damage on the car, but if you take care of your car you won't have a problem with that or they also have an additional policy you can purchase which will cover most damage up to a certain price point.

Alot of makes have a 39 month lease which would put you out of warranty for 3 months.

Answer 5

As stated a lease is actually a long term rental(the ownership responsibility is still on you,ie.. plates, insure, maintenance, etc). No matter how good the dealer makes it sound. the lower payments, are promising but higher down payments, fines for extra miles. High payoff if you decide to kee, low payback if you decide to "sell" it back. there is so much against you with a lease. The dealer has the advantage and makes it sound so good to make the "sale" Why not with the extra PROFIT it brings them.