To Buy or Not to Buy

When thinking about a new Ford car, truck, or SUV, the first thing that comes to mind is buying it, but for a lot of people, a brand new car is an extravagance few can truly afford. A brand new car can also be considered a poor investment because of the depreciation that takes place as soon as it is driven away from the dealership. So what other options are available for drivers who want the luxury of driving a brand new car without the price tag? The answer is simple, they can lease it, but there are a few important things to remember about Ford lease deals.

Leasing a car is akin to renting an apartment. For example, when you rent an apartment, you pay a deposit and then a monthly fee to live in the apartment. Leasing a car is similar because it does not require the financial investment purchasing a new car does. It allows you to drive the new car without paying a hefty sum of money or taking out a loan. It also requires a lower down payment option, like a small rent deposit. As with any financial venture, there are pros and cons that are dependent on the individual consumer.

Initial Out-of-Pocket Expense

There are a few things to be aware of when deciding to lease a car over purchasing. The first thing to take into consideration is the down payment. The down payment usually goes towards the overall cost of leasing the vehicle. Pre-paying a considerable sum of money in order to get lower monthly payments in a lease deal seems like it would be a good idea, but actually can cost you more money in the long run. This seems counterintuitive, but if the car is wrecked or stolen in the first few months of the lease and you have already pre-paid a large amount, you will be out that money. It makes more financial sense to put down a smaller initial payment and opt for higher monthly payments. The money you don’t use towards the down payment can go into an interest-earning account and be used to make monthly payments.

Insurance Coverage

Another thing to consider is Gap Insurance.  If the car is totaled before the end of the lease, your insurance might not cover the rest of the money owed on the lease, which means you will have to pay out the rest of your lease and for a new car. Gap insurance is another layer of protection that helps cover the rest of the money owed in these situations. When looking into lease deals, make sure the contract offers gap insurance.

Mileage

Your annual driving mileage is also an important factor when leasing a car. Most lease deals cap the number of miles that can be used each year or over the term of the lease. Anything over that maximum is going to get costly, as they will charge by the mile. Sometimes that can be upwards of $0.30 per mile over the maximum amount. Being truly aware of how many miles you drive annually will help you in making the best financial decision. In many situations, it will be better financially to overestimate your annual mileage. Then you could adjust when renewing your lease.

Maintenance

A mistake many people make when leasing a car is not maintaining the vehicle. At the end of the lease, if there is damage beyond normal wear and tear, the leasing company will charge for the repairs. Normal wear and tear does vary from company to company, so it is imperative to read the fine print when going over the contract. Make sure you completely understand expectations for maintenance and stay on top of any damages.

Lease Term

The final big misstep people make when leasing a car is leasing for too long. The recommended lease length is around two to four years. You do not want to lease a new car for longer than the initial warranty. Outside of that initial warranty, you will start to spend extra money on maintenance or for extended warranties for a car you do not own. If you are interested in driving the same car for longer than three or four years, you would be better off buying the car from the outset.

Why You Should Consider a Ford Lease Deal

According to Consumer Affairs, car prices have been steadily rising over the last few years, but monthly lease payments have actually decreased. This is in large part due to the renewed interest in small, fuel-efficient cars over big trucks and SUVs. Many car companies and dealerships are offering incredibly low lease payments on new trucks and SUVs in order to move them off the lot.

If you feel like leasing a car is the best financial choice for you, Ford offers unique leasing features and benefits through their Red Carpet Lease program.

The Red Carpet Lease program allows drivers to choose from a variety of lease terms, including 24 and 36-month leases, which is the advisable length of time to lease a vehicle. They also extend seven different mileage options to cover travel and long commutes, allowing for drivers who spend a lot of time in the car not to go over mileage maximums. Not only are these more practical options available, but the Ford lease deals also allow the driver to customize the new vehicle with approved accessories so that the car not only fits their needs but their style. At the end of the lease term, Ford will allow the customer to buy or lease a new Ford or purchase the leased vehicle at a pre-determined price. If the driver wishes to return the vehicle at the end of the lease, they can do so once all obligations have been satisfied, such as additional maintenance or mileage charges. Ask your local Ford dealership for additional details or visit the Ford website.

There is a wide range of driving options available to drivers. Leasing a vehicle is one of many, but for a consumer who likes to stay on trend with their vehicle, but not spend a lot of money on a depreciating asset, a lease deal is a workable choice. As long as the lessee reads the fine print and understands the pitfalls of leasing a vehicle so that they can avoid them, it is a safe alternative to purchasing a new car. Research and foresight are always key in any large purchase, especially one that loses value so quickly. Stay in the know about your Ford lease deal options.