What You Should Know About New Car Leasing

What You Should Know About New Car Leasing

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You have your heart set on buying a Toyota Land Cruiser, a handsome sport utility vehicle that is synonymous with off-road fun. With a price pushing $80,000, it is also the most expensive Toyota vehicle that you can buy, easily rivaling the cost of a Land Rover, Mercedes-Benz or other high-end model.

The Toyota Land Cruiser like any high-end model can be had for cash if you have it available. Most new car shoppers, however, will buy or lease their Land Cruisers, choosing to spread out their costs in a bid to afford their SUV. Before you lease your next vehicle, there are some things that you should keep in mind.

Trim Levels

Unlike the Toyota Land Cruiser, most new vehicles come in a variety of trim levels. Before you negotiate your lease, you will want to find a model that offers the package that you want.

Trim levels differences will affect your price, perhaps by hundreds of dollars over the course of the lease. Buy a new vehicle based on the amenities you want, then negotiate your best deal. Leasing a car should be based on meeting your needs, not by fitting your needs into a package that just does not work for you.

Down Payment

Most lease deals require you to put some money down, an up front payment that may also cover your first and last month’s lease payments, the acquisition charge and other fees. If you arrange for no money down leasing, your monthly payments will be larger.

Use a loan calculator to determine what you can afford to pay each month. If you have your heart set on a Toyota Land Cruiser, then you may want to increase your down payment to afford your monthly payments. In any case, you will not recoup your down payment as it is part of the overall cost of new car leasing.

Mileage Limits

Standard lease agreements contain mileage limits, typically 12,000 to 15,000 miles per year. Go over the agreed upon limits and you will be charged a per mile cost, typically 20 cents per mile.

Calculate the number of miles that you expect to drive during the lease term. If you want to keep your Land Cruiser for three years and you anticipate driving no more than 40,000 miles during that time, then your average annual mileage comes in at 13,333 miles. Look for a lease term that is longer than that average.

Term Considerations

Car leasing terms may average 36 months, but you can lease a new car from 12 to 60 months. Such leases are typically tailor-made to the customer’s needs, with some leasing companies showing more flexibility than others.

Of importance when considering a lease term is the new car warranty that comes with every vehicle. If your lease is for a term that is longer than the warranty, then you will be responsible for those costs. Car repairs can add significantly to your cost of leasing, thus you may want to align your lease plans with the warranty offered.

Lease Notes

Always negotiate the price of your vehicle before discussing financing. This means that if your car has a sticker price of $81,465, you will want to negotiate your deal before arranging for financing. Quite possibly you can save hundreds, maybe thousands of dollars through careful negotiation.

Choose a closed-end lease if you want to walk away from your car when the lease term ends. You may still be responsible for other costs such as excess wear and tear or going over you mileage limits, but you will be free to shop for a new car when the lease ends. Lastly, ask for gap insurance, coverage that protects you in the event your leased vehicle is destroyed or is stolen.

Author Information

Contract hire sales executive David Gillon, works for www.frontierleasing.co.uk.  He is a car finance expert who regularly blogs about car leasing and the benefit of contract hire versus. buying a car for business or individuals.

See AlsoCash Payments and Your New Car Deal

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