Car Lease Agreements
When you want to close a deal you need to sign a contract and you should be aware of what that document contains. Car lease agreements are meant to provide you with a leased car and if their content might vary from dealer to dealer, the main elements remain the same.
To make sure you perfectly understand what you are signing, you can even ask the dealer to provide you a blank lease agreement that you can examine. It’s not wise to read the contract for the first time in the dealer’s office under all that pressure. A car lease agreement is divided in several sections that are regulated by federal laws. You should have an idea of what every section is about in order to be able to understand the content.
The ones that you should pay more attention to are those which state how much down payment you will have to cover at signing, how high is your monthly payment and how is determined, what other charges are involved, what happens if you decide to terminate the contract earlier and what happens in case of excessive wear and tear.
Although the law regulates the existence of these sections, the other details are all up to the dealer. The value of the vehicle you’re leasing, the fees and the monthly payment are all decided by the dealer that might be interested in making a mistake or two. That’s why you should pay attention to all the details and correct the mistakes before it’s too late. There is no law that punishes dealers for this kind of mistakes and you don’t have a few days at your disposal to cancel the lease if you find a mistake. The moment you sign the car lease agreement you should be sure that everything is perfect.
A car lease agreement will also specify the amount of insurance you will have to purchase. Most dealers will require liability coverage of $100,000 per person and $300,000 per accident and an additional $50,000 in case of property damage. Comprehensive insurance will also be required as well as collision coverage while the maximum value of your deductible can’t exceed $500. This numbers are still friendly if we take into account that for a lease in Canada the amount of liability required if of $1,000,000.
When it comes to car lease agreements many fear the wear and tear penalty because they think the leasing company will charge every little scratch and dent. Usually that’s completely untrue because these leasing companies also take into account the traffic you’ve been driving through. If you notice deep scratches or tires worn out you should just have the car repaired before you have to return it and not face a penalty bill.
A mileage limit is also something that will be stated inside the leasing agreement. Most people are ok with 15,000 miles a year, but you should know that if you exceed the limit the fees involved can be significant. Most leasing companies will charge you with $0.20 or $0.30 per mile. Early termination is also for debate. You might not be allowed to end the lease during the first or last months of leasing and the cost involved varies from company to company depending on how they decide to compute what’s left of the lease balance. Nonetheless, you should avoid the early termination of a lease because the cost is usually very high. Gap coverage is also important for a lease. If it’s not offered for free in the lease agreement, you should definitely consider paying the fee involved.
You might also want to read:
Post tags: Tags: automotive articles, car lease agreements