Are you thinking about leasing a car? It’s not a bad idea—you’ll get to drive a slick new car for a few years, and as long as you stick to the terms of your auto lease, you can trade it in for a different ride at the end of your agreement. Although you’re going to be eager to drive your car as soon as possible, you should take the time to avoid these five car leasing mistakes.
1. Failing to Negotiate
Don’t let your car salesperson pressure you into a lease you’ll regret. Never be afraid to negotiate the terms of your vehicle lease—remember that you have control of the situation. The salesperson is willing to bend the lease in his or her efforts to get you in a new car. Before heading over to the dealership, do some homework. Find out the invoice price of the vehicle you want, and attempt to talk down the overall price of the car as close as you can to that number.
2. Limiting Your Mileage
The tighter your mileage restriction, the lower your monthly payment. You can shave some dollars from your monthly payment by agreeing to an annual limit of 10,000, but you should shell out the extra cash for some more wiggle room. Consider this: the average driver easily drives over 10,000 miles a year. Don’t let a suffocating mileage limit and the looming threat of overage fees keep you from a summertime road trip.
3. Making a Big Down Payment
In the best case scenario (one where you an excellent credit score), you will be able to avoid a down payment altogether. Let’s say you have to put something down in order to lease your car. A large down payment will lower your monthly payments—but the chunk you pay up front makes the total amount paid over time higher.
4. Leasing for Too Long
Even though you don’t own the car you’re leasing, you have to bear the cost of repairs. Minor wear and tear are expected. Big damage and malfunctions are your responsibility. As a car ages, it’s more likely to experience malfunctions. Most car leases are good for two to three years; when you’re looking to lease a vehicle, don’t agree on anything longer than 3 years. The average manufacturer’s warranty is valid for three years (or 30,000-35,000 miles). After that, you face having to pay for an extended warranty or any major repairs. If you fall in love with the car, you should just buy it.
5. Skipping the Gap Insurance
What is gap insurance, and why would pay for extra insurance on a car you don’t own? Remember that you’re responsible for anything that happens to the car, whether it’s smashed or stolen. Gap insurance will help you pay for the value of the car when your car insurance won’t cover it.