Many people get excited when they get an opportunity to drive better, newer and more elegant car models for less money than the cost of purchase. Due to the excitement, many people tend to make many costly mistakes.
If you are planning of leasing a car, here are some dumb mistakes that you should avoid.
Paying a lot of money upfront
In many cases, dealers advertise low monthly lease payments on new vehicles, but consumers are asked to pay several thousands of dollars at the beginning of the lease term for them to benefit from rock-bottom payments.
As a consumer you should avoid paying a lot of money in advance. This is because in case the car is wrecked or stolen, you won’t receive the money back. In the event any of these things happen, the leasing company is compensated by insurance but you don’t receive any money back.
Experts recommend that you should not pay any money in advance and if you have to pay, you should not pay more than $2,000.
Forgetting gap insurance
The value of a new car usually drops significantly once the car is drove off the lot. This means that in case the car is stolen or damaged, the insurance company pays for the value of the car while off the lot which is usually lower than the original value of the car.
This means that you have to cover the difference. To be on the safe side, you should never lease a car without gap insurance that covers the difference on your behalf.
Underestimating the miles driven
Many leasing contracts have a driving maximum of 12,000 to 15,000 miles per year and if you exceed these limits you can be charged an extra 18 cents to 25 cents per mile.
In some cases the required monthly lease payment can increase with increase in mileage which can see you owing a lot of money to the leasing company.
To avoid the extra fee, you need to know your driving habits before you sign the contract. If you know that you will drive more miles than the agreement allows, you should ask for a higher limit.
Not maintaining the car
You should remember that if damage goes beyond normal wear and tear you have to pay extra fees. Normal wear and tear varies from one company to another; therefore, you should always ask what the lease-end-condition guidelines are.
To be on the safe side, you should always ensure that the car is in good condition before you return it to the leasing company.