Grasping your car or truck lease agreement conditions and terms can hardly be said to be an intuitive feat, especially by some of us who go for everyday English, to make sure we understand. Just to be clear, leasing and buying are not the same thing. In fact, it is similar to renting. As such, the most essential contract details relate to liability, responsibility, and ownership; including lease vehicle insurance, normal wear and tear, and lease return or extension.
Read More: Differences in Leasing vs Buying
Insuring a leased vehicle is the same as getting insurance for any other type of vehicle. In the case of leasing, however, the lease agreement typically stipulates the lessee to secure comprehensive auto insurance. To be clear, the leasing company owns the vehicle, the lease provides the rules that allows you to drive it. Normally one of the conditions is full vehicle protection, aka, comprehensive insurance.
Exactly what qualifies as normal vs excessive vehicle wear and tear often is stipulated in a standard lease agreement. This is very critical because when you bring back your leased vehicle you may be billed for wear and damage that falls outside of the coverages. If that makes you uncomfortable, then be sure to inquire about Excessive Wear Insurance to take life’s ambiguity out of the thought process.
We advise getting in touch with the dealership you leased from leading up to the end of your agreement and establish your end of lease requirements. While doing a lease return inspection, you might also choose to request a vehicle lease buyout or lease extension. One allows you to keep your lease for more time, while the other lets you buy your leased car.
A lease buyout loan is a specialized solution that allows you to buy your leased vehicle at the end of your lease terms.
Leasing dealers normally determine the difference between normal wear and tear in their lease contract terms. The ultimate judgment is usually based on missing equipment.
Of course, you can use your vehicle as a trade. Taking advantage of the equity from the trade may lower your monthly fee, but it will not alter the overall cost of the lease agreement.