Car Lease Responsibilities
What are "lease end service charges"?
Lease-end service charges are the things that have accumulated over the term of the lease that you maybe weren't paying attention to. Wear and tear issues, does the dealer need to clean the interior, have some scratches filled, is there anything cosmetically wrong with the vehicle? As well as any additional mileages you have accrued he'll have to pay a charge per mile for anything past the terms of the original contract, so these are all things that can add up to become a pretty large pay out at the end of the lease term, when most people feel they'll just going to toss the key back to the dealer and walk away.
Can I negotiate the mileage allowance on a lease?
One of the dangers of leasing is getting yourself into a contract where you are going to exceed the mileage limits that comes stipulated in the contract. And this is one of the points that where it is really important to be honest with yourself and really analyze how many miles do you drive per year? Are you going to be using this vehicle as a commuter car? Are you going to be using this vehicle to visit far away friends and relatives? These are things you need to be honest with yourself because that mileage limit per year is a negotiable factor in the lease. In fact, a dealer will very often get your payment down as low as possible. Will authorize no more than one thousand miles per month driven. And the is just not very realistic for most people. And so be aware of the fact that that mileage line is also completely negotiable. It may raise your payments slightly. But the balance of coming into the dealership at the end of the lease term owing thousands of dollars in mimleage charges, could be well balanced out there.
What is a "disposition fee"?
A disposition fee is a charge that the car dealer will ask you to pay in order to take the vehicle back into his inventory. It's very similar to a freight or a delivery charge when the vehicle was new. The vehicle needs to come back in and have the paperwork to process it back into the dealership's inventory. There's some manual labor that is needed to get the vehicle cleaned up and prepared for sale again, and quite often as part of the lease program that will be written into the contract initially. The consumer carries that weight. When it comes to disposition fees, depending on how your negotiation is going, that might be something you might want to actually work on and get reduced, if not taken out. A disposition fee is really a way for a car dealer to cover his costs. If you're comfortable with that - because it won't be a great amount of money - it's standard practice and it's accepted. If a disposition fee is something you want to negotiate out of your car lease contract, make sure you do it before you sign.
What does "early termination penalty" mean?
Early termination penalties refer to anything that's written in the contract such that if you return the vehicle before the payments have all been finished, and before the full term of the lease has happened, then there'll be a charge for paying it off earlier, for taking the vehicle back early. Early termination penalties can be very substantial fees, so if you have any idea that you might be wanting to get rid of the vehicle for the end of lease term make sure you read your contract very closely to see how much it's going to cost you to get out of the lease early. It may be worthwhile to consider buying the car instead, or looking at a different vehicle together.
What should I do before returning my car at end of lease term?
When you bring the vehicle back in to the dealership if you're going to give the keys back, they are going to be looking at the condition of the car. So, just as if you were selling it to a private owner, you want to be sure that you've carried out good car maintenance on the vehicle, and that it is as clean as possible. So have it professionally detailed or spend a long Saturday afternoon making sure it looks as good as possible. Secondly, you might want to do a little research to find out what the vehicle is actually worth. As we've discussed earlier, leasing your paying difference between the price of the vehicle new compared to the price of the vehicle at the end of the term. Over three years that guess may have been wrong and where the assumption was the vehicle will be worth fifteen thousand dollars, in reality three years on it might be worth seventeen thousand dollars. So, to your advantage it might be better to buy the vehicle for fifteen thousand dollars and then sell it to the marketplace on your own, thus pocketing the extra two thousand. So it's worth doing that investigation. On the flip side your payoff might be fifteen thousand dollars while the market has actually been harsher than expected and its only worth twelve thousand. If that's the case hand the keys in and be on your way.
Am I responsible for servicing my leased vehicle?
You are absolutely responsible for servicing the leased vehicle, just as you should be servicing it if you bought it yourself. If you bought the vehicle yourself, you're protecting your own investment. If you've leased the vehicle, you're protecting that moment when you bring the vehicle in at the end of its lease term.
What happens if I miss a lease payment?
Missing a lease payment on a car is very similar to missing a purchase payment. It's bad for your credit score and it's bad for your relationship with the lessee company. If you do miss a payment, you should make sure you contact your lender as soon as possible to explain the situation and make sure there's no negative hits on your credit score.
What alterations can I make to my leased vehicle?
Unless you have prior approval from the lender you cannot make any modifications to the vehicle. Any modifications you make will need to be cleanly and discreetly removed before you return the vehicle at the end of the lease term. So, it means if you're putting new wheels on the vehicle make sure you swap them back with the stock wheels before you return the vehicle. As an example, if you do replace the wheels changing the vehicle dynamics and the handling balance can cause additional wear and tear. You may be putting additional wear on the brakes, as an example, or handling or the suspension and that could end up costing you when it comes to additional wear and tear charges. So, the rule of thumb is, if you're going to lease the vehicle don't make modifications to it. If you're insistent on doing things to the vehicle, then buy one. Good advice is when you take the keys to a leased vehicle is that you really deeply familiarize yourself with it. Read the owner's manual. Speak to other owners. Learn a lot about your vehicle, because you're going to look to bring it back in that similar state at the end of your lease term. So, it's important that make sure you've got the vehicle in as close to perfect, and as close to stock as you can have.
