Car leasing mistakes can leave a big dent in your wallet. Today’s article will focus on some of the most common car leasing mistakes and how to avoid them. A big reason why consumers choose to lease is that it puts them in a newer vehicle for less than the cost of a straight purchase. However, there is a need for caution when taking this route. One or two oversights and you could end up paying a lot more than expected. Continue reading to learn what some typical car leasing mistakes are.
Having a lease that is too long
It’s suggested not to rent a vehicle past its warranty period. The warranty period on a leased car is typically 36,000 miles or three years. An average car lease is usually between two and four years, although it’s not uncommon for contracts to be longer than that. However, the longer you have the automobile, the higher the chance you will have to pay extra maintenance costs. If you plan to keep a car for more than three years, buying would probably be a good option.
Not getting gap insurance
If a leased car requires an insurance payout totaling its value, that payout may be significantly less than what the consumer is responsible for in such a circumstance. For example, let us say your car becomes totaled or stolen. The insurance company will make a payment based on the current value of the vehicle. However, because a new car substantially decreases in value the moment it’s driven off the lot, this amount will be much less than what you are obligated to pay. Unless you have gap insurance, in which case the policy will cover the difference. A good recommendation is to lease a car only if your contract specifies this specialty insurance coverage.
Failing to consider how many miles you will drive
Not taking into account how many miles you will drive is one of the most frequent car leasing mistakes. Most leasing contracts stipulate a maximum driving limit of around 10,000 to 15,000 miles a year. Passing the limit will usually incur a fee. You could end up owing anywhere from 5 cents to 30 cents per extra mile driven. This will leave you saying yikes when a big bill is due at the end of the contract. Therefore, it’s a good idea to estimate how many miles you think you will be driving. If the number is over the limit, ask for the limit to be increased. Be aware that this will most likely increase your monthly payment.
Hopefully, this article has been informative and will help you avoid these car leasing mistakes. While leasing can be the right option for some, it’s important to know the common pitfalls associated with it.