Car leasing is one of the most popular ways to finance a new vehicle, and it’s not hard to see why. A lease allows you to drive a brand-new car for a set period of time (usually two to four years) without having to make a large down payment or monthly payments.
Leasing also has its drawbacks, however. For one thing, you never actually own the car, so you never build up any equity in it. And at the end of your lease, you’ll have to turn the car back in to the dealership.
If you’re thinking of leasing a car, it’s important to understand how leases work and what the average car lease payment is. Here’s what you need to know about car lease, it’s monthly payments, and more. Click here for more info about car leasing.
How Car Leases Work
Leasing a car is similar to renting an apartment. You’re essentially paying to use the car for a set period of time, which is the lease term, after which you’ll have to return it or get it as a car purchase.
When you lease a car, you’ll be asked to make a down payment (usually equal to two-month payments) and then make monthly payments for the duration of your lease. These can be lower monthly payments if you were to buy the car outright or through auto loan. This is because you’re only paying for the car’s depreciation during the lease term you’re driving it.
At the end of your lease deal, you’ll have three options:
- Return the car to the leasing company with no further obligations.
- Buy the car outright or car loan for its residual value, with an acquisition fee.
- Get an auto lease with a new car lease fees, new lease payment plans, new lease agreements, interest rate, or from other leasing companies.
If you decide to buy the car or lease a new one, you’ll have to make a lump-sum payment called a balloon payment. If you decide to return the car, you may be charged for any wear and tear that exceeds normal “fair wear and tear” guidelines.
The Average Total Cost of a Leased Car
The total cost of a car lease will also depend on factors such as the car’s price, the length of the lease, and any extras you add on.
Say you choose a car model with a sticker price of $30,000 and a three-year lease. If the car’s residual value is 40%, you can expect to pay around $21,600 residual value over the course of the lease. This includes your downpayment, monthly payment, and any fees, interest rate, or charges associated with the lease. Car lease, as well as, car shipping cost varies from different things such as model, size, weight, distance to travel and so many things.
The disposition fee, on the other hand, is a one-time fee charged by the dealership when you return the car at the end of your lease. This fee can range from $200 to $400, depending on the dealership.
If you’re looking to save money on your lease agreement, you may want to consider a shorter lease term. A two-year lease, for example, will generally be cheaper than a three-year lease.
The Average Monthly Payment for Car Leasing
The number of monthly lease payments will depend on several factors such as the car’s price, the length of the lease, the down payment, and any extras such as gap insurance or extended warranties.
In general, however, you can expect your monthly lease payment to be lower than if you were buying the car outright. This is because you’re only paying for the vehicle’s depreciation fee during the time you’re driving it.
The Advantages and Disadvantages of Lease a Car
Now that you know a how leased vehicle work and what the average cost of a car lease is, let’s take a look at some of the advantages and disadvantages of leasing:
Advantages of Leasing
- You can drive a brand-new car without having to make a large down payment.
- Your monthly lease payments will be lower than if you were buying the car outright.
- You’re only responsible for the car’s depreciation, lease fee, administrative fee, and maintenance costs during the time you’re driving it.
- You can trade in your leased cars for a new one at the end of the lease.
Disadvantages of Auto Leasing
- You never actually own the car, so you never build up any equity in it.
- At the end of the lease, you’ll have to turn the car back into the dealership.
- You may be charged for any wear and tear that exceeds normal “fair wear and tear” guidelines.
So, should you lease or buy new cars? The answer depends on your individual circumstances. If you’re looking for a lower monthly payment and don’t mind turning in the car at the end of your lease, then leasing may be the best option for you. However, if you’re looking to build equity in a car and own it outright, then buying may be the better choice.