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Vehicle Leasing Guidelines

Posted by Wilmar, Inc.

vehicle leasing guidelines

Often, business people who want to drive newer, better equipped and more luxurious cars and trucks choose to lease a vehicle for their business rather than buy one. What's more, leased vehicles are always under warranty and need only minimal routine maintenance. 

For many business owners, leasing a vehicle is a better option than buying a new one. In fact, an increasing number of Americans are leasing vehicles. Are you considering leasing a car or truck for your business? Here are some basic vehicle leasing guidelines, along with some considerations and warnings.

lease lowdown

Basic Factors to Consider

There are several factors to consider when leasing a vehicle. For example, you'll need to consider your initial payment, which includes your down payment (capital cost reduction) and any additional fees.

Next, consider the amount of the monthly payment as well as the number of months for the terms of the lease. Furthermore, there may be extra fees when the lease ends.

Negotiating Your Lease

Just as in buying a vehicle, you can negotiate the cost.  

  • First, negotiate the final purchase. Consider that the negotiated purchase price affects whatever leasing option you'll receive on your leased vehicle. The lower a vehicle's total price tag, the lower the payment will be.
  • Be sure to get the price in writing.
  • After agreeing on a final purchase price, the next step is negotiating your leasing terms. Of course, the larger your initial down payment is, the lower you'll be paying in monthly payments.
  • Know the amount of your "capitalized cost", which means the vehicle's negotiated price, in addition to the disposition fee and acquisition fee. Most leases require an acquisition fee that can range from $250 to $450, as well as a disposition fee of an additional $300 to $400.
  • Also, don't forget to factor in possible "capitalized cost reductions", such as a cash down payment, any rebate reducing your total capitalized cost or trade-in credit.
  • Be prepared to back out if you suspect a dealership is taking advantage of you, or if you feel something isn't quite right.

 Other Considerations and Warnings

  • A monthly payment for a leased vehicle is determined by the difference between a vehicle's capitalized cost (transaction price) and its residual value (the vehicle's value when the lease term ends). 
  • The biggest factor affecting lease terms is your credit score. Thus, having just an average or, even worse, a below-average credit score can mean not only a larger down payment but also higher monthly payments.
  • Most people with poor credit are unable to lease a vehicle.
  • Check a used-car pricing guide so that you can know how well a vehicle's value has been maintained. Another way to compare residual values in new cars is by consulting a leasing company.
  • While some dealers may reduce the monthly payments or waive the down payments, others will not budge.
  • To reduce overall expenses, select dependable models having the best gas mileage, besides low maintenance costs and exceptional safety features.
  • Before signing a lease, be sure you've thoroughly read all the fine print and understand everything.
  • When your lease ends, usually, you're given the choice of buying the vehicle at a preset price if you really like it. On the other hand, this option can be more costly than simply purchasing it outright.
  • You'll be offered what's know as "gap insurance", which is guaranteed asset protection. This is an insurance covering the rest of the lease payments in the event that a leased vehicle is totaled in an accident or is stolen.
  • Become familiar with some of the common terms used in car leasing before visiting dealerships so that you won't appear clueless. The more you understand what the finance officer of a dealership is saying, the better odds you'll have of getting a good deal.

For all your vehicle leasing needs, you can depend on Wilmar, Inc, the Southeast's largest independent fleet leasing and management company, Please contact us and learn more about our wide range of services.

lease lowdown

Topics: Vehicle Leasing

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