Car Lease Companies
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Car lease companies offer great deals online for the individual who wants to benefit from the advantages that leasing provides over buying. Manufacturers often provide incentives to make renting more attractive over buying such as below market interest rates and lower up-front costs. Leasing a car is less expensive than buying when considering the amount of a monthly payment. Many drivers opt to rent over buying because they like to drive a new and more expensive car. After the lease period runs out they can just trade it in for a new model or a totally different vehicle of their choice. Car lease companies do require that the vehicle be kept in good running condition with reasonable mileage. At the end of the lease the person renting has the choice of purchasing the automobile if so desired.
Individuals who rent an auto often do so because there is less hassle with renting compared to buying. After buying an auto the owner has to worry about trade-in value and possible negative equity when trading for a different one. Negative equity is where more is owed on the automobile than the fair market value. When trading in a vehicle, the difference left over on the loan amount is attached to the new auto agreement. Car lease companies make it easier on the individual by allowing them to just turn the car in if he or she chooses to do so at the end of the contract. "And I thought to advertise thee, saying, Buy before the inhabitants, and before the elders of my people. If thou wilt redeem it, redeem it: but if thou wilt not redeem it, then tell me, that I may know: for there is none to redeem beside thee; and I am after thee. And he said, I will redeem it." (Ruth 4:4)
A driver has a couple of options when leasing a vehicle, a closed-end or an open-end lease. A closed-end lease means that the value of the vehicle after the rental period is determined beforehand. At the end of the rental period if the individual chooses to purchase the car he or she will pay the value determined beforehand in addition to an administrative fee. The closed-end lease is the most popular type of rental agreement with car lease companies because there is usually less costs to the driver compared to other options.
Open-end lease means that the value of the vehicle is estimated after the rental agreement is up but at the actual end of the agreement the difference between the actual market value and the estimated value is owed by the person renting. Open-end leasing is the least popular type of rental agreement because sometimes the difference between the market value and the estimate value can add up to a lot. Car lease companies do not often point out the disadvantages to different options or other things that can make renting undesirable.
Terminating a rental agreement early can make the driver liable for the amount left on the depreciation. Some car lease companies penalize a driver for terminating an agreement early as they require the remainder of the rental agreement to be paid even if the vehicle has been turned back in. An early termination fee may also be applicable in this type of situation. Overall when renting an automobile a driver should stay the course until the agreement is finalized. The early termination fee can be substantial. A driver should read all the fine print in an automobile lease agreement before signing a contract.
Credit requirements for renting a vehicle are strict compared to buying. Car lease companies view someone who has a higher credit score as a more responsible person who will probably make payments on time and not trash the vehicle. Before opting to rent an automobile get a copy of credit reports from the three major credit bureaus and look over the reports for errors. Correcting negative information can help to raise credit scores. This can be done by filling out a dispute form or writing a letter to the bureau where the error exists. The credit bureau has 30 days to investigate the dispute and answer back. If the creditor of the account in question does not answer within the 30 days the item should be removed from the credit report. Follow up is very important with disputes in order to make sure that the corrections are made.
Mileage limitations and disposition fees are usually associated with renting. Going over the mileage noted in the agreement will mean paying so many cents per mile in fees when it is time to turn the car in. Car lease companies are usually very strict about the mileage requirements and limitations because the higher mileage makes the value of the vehicle less. Companies who rent vehicles may verbally suggest that the mileage fees are negotiable. If this is true the contract should reflect that. A disposition fee is charged to the driver who does not opt to purchase the automobile once the agreement is complete.
Beware of the cap cost set by the dealership that makes up the rental agreement. The cap cost is the amount set by the dealership to sell the car to the rental company. This can make a difference on how high the monthly payment goes up. The cap cost should not be the same amount as the sticker price on the car but instead should be less. The dealership does have the right to receive a margin above the cost so that they make some money off of the automobile. Their cost should cover their margin of rent, utilities, salaries, and so on. Factory rebates and other incentives should be applied to the cap cost so that the person renting gets the benefit entitled to him or her.
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