Options are available to lease a car with an option to subsequently buy it. These lease-to-own programs are popular with certain qualified drivers and offer the combined benefits of both leasing programs and automobile ownership. First, it is necessary to make sure you fully understand what a lease and lease agreement are.
A lease agreement is a temporary agreement between you and another party. You are the lessee and the other party is the lessor. You make a down payment to prove your creditworthiness and to also lower your monthly lease installment payments. The amount of down payment you can make impacts your approval status. The higher the down payment you make, the more likely you are to be approved for the lease. You then agree to make monthly installment payments over a specified number of months. When those months (lease term) expire, you are required to return the vehicle. The vehicle is then inspected and you are either charged for mileage overage and damages or not.
When you lease to own a vehicle, some of the standard lease agreement terms apply, while others are significantly different. First, a lease-purchase program is not the predominant choice among drivers. For this reason, it is even more crucial to examine the terms of your agreement thoroughly before signing it.
One benefit of lease purchase programs is your money is not simply gone at the end of the term like it would be during a regular lease agreement. Many drivers do not realize this, but most leasing companies offer the option to purchase the vehicle at the end of the lease as protocol. The trick is understanding the value of the vehicle compared to the offer the lessor is extending.
The leasing company determines the residual value of the automobile at the end of the lease. Most leasing companies overshoot the actual value of the vehicle, which gives you certain potential advantages. For example, leasing companies set the residual value high to give themselves negotiating room.
Most are therefore open to negotiations, which means you are more likely to get a better price. Research the value of identical make and model used automobiles on the open market. Find the average selling price for your make and model and use it as leverage to bring down the leasing company’s selling offer.
Most leasing companies will be amenable to lower offers if it helps them avoid the hassles of taking the car to an auction and trying to sell it. Before doing any of this, however, use a free lease vs buy car calculator online and compare the costs of taking out an auto loan to purchase a car vs. entering a lease-to-own program. You might have grown fond of the make and model vehicle you were leasing but better prices on identical used vehicles on the open market might be available.