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More and more consumers are turning to the option of car leasingrather than the traditional path of securing bank financing to purchase a car or truck. While vehicle leasing has proven to be an answer for many, the process is much different than buying and is sometimes more confusing for consumers who have only dealt with traditional vehicle purchases. When deciding to lease a vehicle, there are certain must-do steps consumers should keep in mind.
1. Be Mindful of Your Credit Scores
Creditworthiness is a vital determinant of the type of lease a customer will be offered. Higher credit scores result in better rates for customers, with the only exception being when there is a dealer subsidy involved. Checking credit reports a month or two before seeking the lease is a good idea because it gives potential customers time to dispute mistakes that may be present in their credit report. In addition to gaining better rates for customers looking to lease a vehicle, higher credit scores can also be used to decide if a certain type of vehicle can be leased. Certain vehicle makes and models require higher credit scores than others.
2. Understand How a Lease Impacts Cash Flow
One direct advantage of leasing over buying is that it may provide a customer with cash flow relief by presenting a lower monthly cost to lease than it would be to be to purchase the same vehicle. Experian Automotive reports that years of low-interest rates have resulted in lower monthly payments, making leasing a much more attractive option for consumers. It is important to remember that, unlike traditional financing of a car, the consumer does not own the car after the term of the lease is finished. At this time the customer can either return the car to the dealer or attempt to purchase the vehicle.
3. Make Sure You’re Purchasing a Lease Rather Than a Car
Leases are mostly controlled by vehicle manufacturers, which exposes the consumer to a totally different set of circumstances than when dealing with traditional auto loans. A key difference in the process is that manufacturers are not just looking at credit scores when deciding to allow a customer to lease a vehicle. Lease Value Ratio is also carefully considered, so the willingness to provide a small or medium down payment can prove beneficial for the customer. Also, customers who are more flexible in their vehicle choices and willing to compare manufacturer options are more than likely to find a favorable rate. Consumers also have the option of taking over another customer’s lease. This option is usually chosen by customers who do not want to be responsible for a car leasefor the full length of typical lease terms.
Whether you’re looking to lease a car, buya car, or just learn more information about the leasing process, Below Invoice can help. We are a leading auto broker in Orange County, CA. If you’d like to schedule an appointment, please call 949-630-0303 to speak with one of our knowledgeable representatives.