What You Need to Know About Auto Leasing Los Angeles
When the time comes for a new car you’ll need to choose between buying and leasing. We’ll tell you what you need to know about auto leasing Los Angeles.
Keyword(s): auto leasing los angeles
There are some cities where you really need a car to get around. One of those is Los Angeles.
Buying a car is a big commitment, especially for those of us with frequently changing styles. If you’re curious about the process of auto leasing Los Angeles, you’ve come to the right place.
Read on to find all the essentials you need to know about auto leasing Los Angeles.
Your Go-To Guide for Auto Leasing Los Angeles
Just like renting vs buying a house, there are advantages and disadvantages to leasing vs buying a car.
Leasing is right for you if you’d prefer smaller down payments, a lower monthly payment, and less of a commitment to the car.
With a leased car, you don’t have to deal with the hassle of selling when you’re ready to move on. You just need to give it back to the dealership at the end of your lease.
There are a few rules and restrictions that come along with leasing. It’s good to know these details ahead of time so that you can make the most of your lease. Let’s dive in.
First, What Is a Lease?
A lease is essentially a long term rental of a car. The car is owned by the lessor (the bank). The lessee pays the lessor to use the car per the terms of the lease agreement.
Lease agreements can get confusing, so read on for the most important terminology to understand.
Mileage Allotment
Before you begin the auto leasing Los Angeles process, you need to get an idea of how many miles you drive each year.
Your lease agreement will include a mileage cap. Typically, this will be 10,000 – 15,000 miles per year of the lease. That is the total mileage you can put on the car before incurring additional charges.
Since any miles you drive beyond this limit will cost you, it’s a really good idea to get a lease with a realistic mileage limit for your lifestyle.
Do you drive just a few miles to and from work and social engagements? or events like a classic car cruise night? A lease is great for you. Do you go on a lot of spontaneous road trips or drive for a living? A lease may not be so ideal since you’ll likely go over your mileage.
Excessive Wear and Tear
At the end of your lease when you return the car, you’re expected to return it in good condition.
Of course, the car won’t be in the exact condition you got it in, but you need to avoid excessive wear and tear. Otherwise, you’ll be charged repair fees.
Examples of excessive wear and tear include any significant body damage, non-removable stains, missing or broken parts, and any alterations to the car.
Warranty
Typically, car manufacturers include a three year bumper to bumper warranty that protects the car should anything outside of your control go wrong.
The length of your manufacturer warranty should be the maximum length you lease the car. This is because you could end up facing costly repairs for a vehicle that you don’t own.
Drive Off Fees
Because a new car loses value the second it leaves the lot, most leases will include drive off fees.
This, plus DMV fees and a security deposit, is the amount you’ll pay to start the lease.
Budget For Taxes
Make sure that you understand your monthly payments so you can budget appropriately.
If your lease payment is $250 a month, you’ll likely be paying closer to $275 or $300 a month when you factor in taxes.
Always Read Reviews
Before getting a new car, it’s always a good idea to check out consumer friendly review publications like Kelley Blue Book and Consumer Reports.
These will help you form an honest opinion about the car before you get it.
Residual Value
The term “residual value” refers to the amount the car will be worth at the end of the lease.
A car’s value depreciates based on age, mileage, and condition. The lessor makes up for this loss in value through your monthly lease payment.
For example, let’s say you lease a car that is worth $20,000. After your three-year lease agreement is up, the car is now only worth $10,000. The residual value, in this case, would be 50%.
A car with a higher residual value will offer you lower monthly payments. Check out the Daily News’ list of the 2017 cars with the best residual value.
You’ll Need a Good Credit Score
Getting a good lease deal requires a high credit score. According to DMV.org, the best incentives require a credit score of 720 or above.
With a lower credit score, you’ll still be able to get a lease, but you won’t get the “no down payment” option and you’ll end up with a higher money factor. (More on money factors next).
Money Factor
A money factor is the finance rate for your car lease. It is similar to an interest rate for a loan.
Money factors get confusing to lessees because they are presented differently than interest rates. Like interest rates, however, the amount you will be charged is based on your credit score.
Money factor is expressed as a very small number such as .0005. To better understand, you can convert the money factor to an APR by multiplying it by 2400.
The money factor is not required to be listed in your lease deal, so always ask the dealer!
For more details on money factors, check out this great video by Lease Guide.
There You Have It!
We hope you now feel more informed about auto leasing Los Angeles.
Ready to take the plunge? Buy or lease your next car from Silverback Automotive.
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Skip the stressful experience of spending hours at the car dealership. With Silverback Automotive, we find your desired vehicle, negotiate for you, and deliver it to your local home or office free of charge.
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