5 Common Mistakes People Make When Leasing a Car
It’s very common nowadays to lease a car. Not everyone can afford the cost that comes with buying a car outright, let alone having to fork out the cost to run it and keep it legally on the road.
Whether you’re in need of a new car or you’re looking to switch from buying a car outright to leasing a car for the first time, here are five common mistakes people make when leasing a car.
- Not reading the lease agreement
It’s important that you read the lease agreement from front to back once or twice over. The reason for this is that there can be a lot of confusing terminology and a volume of information in your lease agreement that many tend to just skim past and not consider to be important.
You want to check what’s included in the lease contract from breakdown cover, maintenance, and insurance. Some will include the above, while others will expect you to organise the cover.
It’s always beneficial to have a lease agreement that covers everything you need to drive the car safely and legally on the road.
There have been some issues with missold leases and PCP claimback applications as a result of leases not being right
- Not being aware of the mileage limits
Mileage limits are something to be aware of and while car leases can be generous in their mileage offerings, not all of them will be appropriate for what you need. Some might offer more than enough for some road users, while others might need a lot more miles included, especially if they drive for work.
Avoid going over your negotiated mileage limit so that you don’t incur any additional extra charges. It’s worth being fairly conservative with your mileage requirements so that you hopefully don’t go over what you’ve agreed to with the lease provider.
- A lack of knowledge of your credit rating
Your credit score is something you want to get familiar with as it can come in handy when you’re making big purchases, like a car for example. Many car leasing companies will expect you to have a good credit score before they offer you a lease.
If you have any credit issues, you might find that you struggle to get a lease as a result. While good credit isn’t a necessity for all lenders of car leases, it’s important to a lot of them.
- Skipping gap insurance
Gap insurance covers the difference between the vehicle’s value and the remaining lease that you have in regard to the balance if the car was stolen or written off. If you don’t have gap insurance, then you might have to pay the difference for the car, even if that car is no longer driveable.
Some leases will have gap insurance available, while others won’t. Therefore it’s important to make sure you have gap insurance if you feel it’s appropriate to have.
- Ignoring the lease end conditions and potential balloon payments
It’s good to be mindful of the lease end conditions. The dealership will inspect your car for wear and tear when you come to return it at the end of the lease. There are often charges for this so it’s good to know what guidelines are in place and what’s considered as wear and tear.
These common mistakes will ensure you pick the right car and lease agreement when the time comes.
