Car leasing mistakes to avoid

Posted on Wednesday, December 19, 2018 - 13:52

Leasing a car can be a great way for many people to buy a brand-new car that comes with the latest safety features to suit their needs. This is more so when you have a tight budget that doesn’t allow you to pay for the car upfront. Reading the fine print before you sign a lease contract can save you from financial woe. Here are four leasing mistakes to help you avoid making costly mistakes.

Skipping maintenance

Leasing a car can give you access to the latest models that have not yet been driven by another person. It also means that you will be paying a monthly instalment fee. One thing to keep in mind is that you will need to follow a maintenance schedule to ensure that you return the car in the same condition in which you found it. If the damage goes beyond normal wear and tear you could end up forking out additional fees. Check the lease-end condition guidelines so that you know what the dealer expects on what type of damages are not acceptable when you return the car.

Taking out a long lease contract

Leasing a car can be an affordable option for potential car owners that need a bit of wiggle room when it comes to owning a car. Most car lease terms in Australia usually range from 2-5 years. Shorter lease terms can be affordable with most Australians opting to choose 3 years.

However, the longer you drag out your lease term the more likely it is that you will end up paying more money on maintenance. Choosing a lease period that matches the warranty of the car can be a great way to reduce costs.

You can also use a car lease calculator that can help you calculate how much you will be paying until the end of the lease. You can also consider buying the car if you are planning on taking out a short lease term, with some lenders giving you the option of rent-to-buy at the end of a lease agreement.

Exceeding the odometer limit

You may have found a car that comes with an affordable price that you are interested in leasing. Before you sign on the dotted line, it is vital to read the fine print of the contract. You may find that there are dealers that have a maximum number of kilometres that you can drive when leasing their car. You could end up being charged for exceeding this limit, which can blow a hole in the budget you have in place. It is possible to ask for a higher limit that matches your driving habits but remember that you can attract a fee for this increase.

Get your wheels insured

Driving a new car off of any lot already comes with the depreciation gremlin, even if you are planning to lease it. You may want to consider getting gap insurance to protect your wheels from things such as theft, accidents that totally damage your car or damage caused by a natural disaster. This can ensure that your insurance pays for the sum that remains on the lease when you no longer own the car. There are some cases where your insurance may not be able to cover the total amount that remains. Therefore, having a budget or savings in place can help you adequately cover the amount.

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