You have probably heard of vehicle leasing before, but how exactly does it work? Leasing a vehicle has become a popular option for those who want to enjoy the benefits of driving a new car without the long-term commitment of ownership. We’ll walk you through what vehicle leasing is and the 5 steps to start leasing a vehicle today!
What Is Vehicle Leasing?
Vehicle leasing is like renting a car for a specific period, usually two to four years, from a dealership. Instead of spending the entire price of the car, you only cover the cost of the car’s depreciation (drop in value) during the lease, along with some interest and fees, often leading to lower monthly payments. When the lease ends, you can choose to buy the car or swap it for a new one!
What are Lease Contracts?
Lease contracts typically run from 24 to 48 months or two to four years, with an annual mileage allowance that ranges from 10,000 to 15,000 miles or 12,000 to 24,000 kilometres per year. For example, if your four-year lease allows 20,000 km/year, you’ll have 80,000 km when you return the car.
The Leasing Process
1. Research and Choose a Vehicle
Begin by researching different makes and models to find the one that best suits your needs and budget. Consider factors like the car’s price, mileage limits, and the length of lease terms because these will impact the monthly amount you pay for your lease.
2. Check Your Credit Score
Your credit score plays a crucial role in getting approved for a lease and determines the lease contract and terms you’ll be offered. We recommend checking your credit score to make sure it’s in good shape!
3. Visit a Dealership and Get a Quote
The next step is to head over to a dealership like Birchwood and talk to an expert. Here, you can get a lease quote on the vehicle you want, and get more information on the down payment, monthly payments, and any additional offers or fees.
4. Complete the Application
Once you’ve settled on a vehicle and lease offer, you’ll need to complete a lease application, which includes a credit check. If approved, you’ll sign the lease agreement. The lease agreement includes all the terms and conditions of the lease, including what happens if you go over your total milage, so read it carefully!
Read More: Do Credit Checks Hurt Your Credit Score?
5. Drive Away in Your New Car
After signing the lease, you’re ready to drive your new car home! Make sure to maintain the vehicle according to the manufacturer’s recommendations and follow the lease contract, and you’ll be good to go! Birchwood’s expert product advisors are here every step of the way if you have any questions about your lease.
Leasing a vehicle can be an attractive option if you prefer driving a new car every few years and enjoy lower monthly payments. By following these 5 steps, you can start the process of leasing your dream vehicle today!