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Buying and Selling Cars

5 Key Things to Know About Leasing a Car

Did you know that in 2019 the average cost of a new car was over 34,000 dollars?

Depending on your financial situation, leasing a car might be the best solution for you. But before you run out the door to sign a contract, it’s important to keep track of things to know about leasing a car.

Keep reading to learn what to know when leasing a car.

1. Leasing Is Not Owning

Leasing is more like renting a car for an affordable, monthly price, but at the end of the leasing agreement, you have to return the car. However, if you’ve become attached to your sleek and powerful Audi S7, for example, you might be able to buy it from the company at a reduced price.

2. Leasing Impacts Your Credit Score

Your credit score will almost always drop when you open new lines of credit, but as long as you make your payments on time, your credit will increase. In fact, having a variety of credit on your report, rather than just loans, for example, will help your credit score in the long run.

3. Not All Leases Are the Same

Want to know what to look for when leasing a car? You’ll want to get the best deal, of course, so be sure to compare leasing contracts between companies. They will most likely have different fees and incentives related to the lease that you should take note of.

4. You Are Not Given Infinite Miles

If you’ve ever wondered what to ask when leasing a car, you should never forget about mileage. The last thing you want to do is realize you cannot drive your car anymore because you’ve hit the mileage limit.

A lot of leasing companies only offer 12,000 miles a year and charge you extra if you surpass that number. Do your best to accurately determine how many miles you actually drive in a year and then sign a leasing contract that’s right for you.

5. Do Not Quit Your Contract Early

Leases tend to last 3 to 5 years. It might be best to play it safe and go with the shorter-term contract because if you quit your contract early it is almost like defaulting on a car loan. In other words, your credit score will suffer for it.

Not only that but you’re likely to be hit with a termination fee and other unwanted charges. That is why you should pick a contract and stick with it. As an added bonus, a 3-year contract will most likely mean that the car will still be covered by the manufacturer’s warranty, which will save you money on repairs.

Now That You’ve Read 5 Things to Know About Leasing a Car, Are You Ready to Lease?

After you’ve read these 5 things to know about leasing a car, you can start your search for the perfect deal.

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