After Signing the Deal
When you sign the leasing contract you have just started the beginning of your lease. Once you have signed he contract you no longer deal with the dealers, your questions now go to the leasing company. Unless, it is about the actual car.
Sometimes people who lease a car get a letter describing that another leasing company has bought your lease. Do not worry, because the contract that you had with the other leasing company still applies to your lease. Your terms and payments stay the same and nothing changes from the agreement.
Once you sign the contract, you cannot cancel it. This is the same for both lease and loan contracts. A contract is legal and completely binding. On the other hand, if you think that there may be mistakes in your contract, call your dealer and leasing company as soon as you can. Ending your lease before the term is over can cost you a lot of money, if you must end your lease, wait as long as you possibly can. The sooner you end your lease the more expensive it will be.
If you are moving, read over your contract and look for any restrictions. Some leasing contracts prohibit you to move there cars out of the country, and sometimes even state.
If the contract does allow you to move to a different state, always let your leasing company know, so that adjustments could be made. Due to the different tax rates between states, your monthly payments may change.
Try to keep your end of the contract. Have the agreed insurance coverage, pay your taxes, and pay your payments on time. Do not customize your car, and fix any damages. Pay all your fines that deal with the car, do not drive the car intoxicated, or let unlicensed drivers drive it. Try to keep our car to the schedule of the car’s manual. Save all the receipts of what was done to the car, such as the maintenances, or any repairs. This will help you if there is ever a question, or problem. You do not always have to go to the dealer to get the maintenance done, but it does have to be done by a shop. If you do not do these things, you are violating our contract.
When leasing a car, you must carry the right insurance coverage, sometimes it is even more than what you may carry on your own car. You would also have to add the leasing company to the insurance as “additional insured.” If you get in an accident, or the car it totaled or lost, notify your insurance and leasing company as soon as possible.
You should have the following terms on your insurance: Bodily Injury can be no less than $100,000 for a single person and $300,000 for multiple people. Property Damage is no less than $50,000, or you could combine Bodily Injury and Property Damage, with no less than $500,000 per accident. The Deductibles can be no more than $1000 for collision, no more than $1000 for comprehensive.
If you get into an accident, and you have repairable damages, your insurance company will pay for the damages, after you paid the deductible. When you repair the car, go to a shop that does a good job and uses “original equipment manufacturer” also known as OEM parts. If you don’t, you will end up having to pay at the end of your lease for the repairs to be done correctly.
If the car has been in an accident, some states have a law called “diminished value,” which is a law that requires the insurance company to compensate the car owner for the lower resale value after the car has been in an accident. Since the car is not yours, the payment goes to the leasing company, but if you decide to buy the car at the end of your lease, they should credit you that money. Ask your leasing company how they handle this issue.
If your car is stolen or totaled, your insurance company pays the leasing company what the value of the lease, except for the deductible, which you have to pay. If you owe more on your lease than the value of the car, you have to pay the difference as well, unless you have Gap Insurance. Always read your contract for any clause that lets you off from paying off the lease.
Watch your mileage. Try no to drive more than the agreed number of miles per year (usually between 10 to 15,000 miles per year). If you see that, you are driving more miles than you should try to find ways to solve the problem. Car-pooling or trading cars with someone who doesn’t drive as much, can help you save a few miles. Rent a car to go on vacations instead of driving your car.
If you cannot keep in your mileage limits, then understand that it will cost you at the end of your lease. We do not recommend that you turn your lease in early because you are going over in mileage because it will cost you more. Just be aware that it will cost you so put away some money. Of course, by buying the car at the end of the lease you will avoid mileage fees.
A lemon is a car that constantly has problems. If you have leased a lemon, unfortunately, you cannot trade in the car or get your money back. Although, in most states they have something called the lemon law, could apply to loan or leased cars. Talking with your state Attorney General’s office could help you get more information on how that law works.
Leasing for most people is a good way to own a car. Many say it is problem free, and saves you money. Most of the people, who lease, end up leasing again. Many of them lease for years.
Those who do not like leasing, and have problems with it, it is because they do not understand how to lease and never took the time to learn about it.
Again, avoid leasing if you make more than 20,000 miles per year, if you want to maintain your car yourself, if you plan to customize your vehicle or if you plan to move to another country.