“`html

Leasing a Car: Essential Tips and What to Avoid

Leasing a car can be a smart financial move, but it’s important to understand the process and avoid common pitfalls. At O1ne Mortgage, we want to help you make informed decisions. Call us at 213-732-3074 for any mortgage-related needs.

Things You Should Do When Leasing a Car

Understand the Terms

Car leases come with specific jargon that you should familiarize yourself with before negotiating. Key terms include:

• MSRP: Manufacturer’s suggested retail price, which is non-negotiable.
• Capitalized cost: The sale price of the car, which is negotiable.
• Drive-off fees: Upfront payments like the down payment and sales tax.
• Residual value: The car’s expected value at the end of the lease term.
• Buyout price: The price to buy the car at the end of the lease.
• Money factor: Represents the interest rate; multiply by 2,400 to get the APR.
• Acquisition fee: Administrative costs for processing the lease.

Compare Offers

Shop around and get quotes from various lease companies. Contact at least three dealerships and ask for quotes, including MSRP, capitalized cost, total drive-off fees, monthly after-tax payment, money factor, and residual value. Use these quotes to negotiate the best deal.

Negotiate

Negotiate the car’s capitalized cost and residual value to lower your monthly payments. Dealerships may also be willing to negotiate other details like mileage limit, lease period, buyout price, money factor, down payment amount, and trade-in value.

Check Your Credit Score

Your credit score affects your lease approval and terms. Generally, a good to excellent credit score qualifies you for the best terms. Consider improving your credit score before applying for a lease.

Get Gap Insurance

Gap insurance covers the difference between your car’s market value and what you owe if your car is totaled. It’s usually mandatory for leases and can save you thousands of dollars.

What Not to Do When Leasing a Car

Don’t Underestimate Your Needs

Consider how long you want the lease to last and estimate your annual mileage. Leases typically limit you to 10,000 to 15,000 miles per year. Exceeding this limit can result in excessive mileage fees.

Don’t Ignore Regular Maintenance

Keep up with regular maintenance to avoid extra charges for excessive wear and tear. Check your lease agreement for definitions of “normal” and “excessive” wear and tear.

Don’t Forget to Read the Fine Print

Read through your car lease agreement and understand all the details before signing. Ensure the lease term, monthly payment amount, money factor, capitalized cost, residual value, mileage limit, fees, taxes, penalties, down payment amount, buyout option, and any upgrades are clearly spelled out.

How to Lease a Car

If leasing a car is right for you, follow these steps:

1. Research which vehicle you want to lease and test drive a few options.
2. Check your credit score to see if you qualify for a lease and good terms.
3. Determine the mileage cap and lease term you want based on your driving habits.
4. Get car loan quotes from at least three automakers or third-party lenders.
5. Sign your lease agreement after choosing the best deal.

The Bottom Line

Getting a great deal on a car lease is possible when you know what to expect. Don’t underestimate your mileage, ignore regular maintenance, or forget to read your lease agreement. Understanding how leases work, negotiating your lease agreement, comparing offers, and getting the right car insurance are crucial steps. Checking your credit score can also help you qualify for the best terms.

For any mortgage-related needs, call O1ne Mortgage at 213-732-3074. We’re here to help you make informed decisions.

“`