Leasing Structured with Your Driving Habits in Mind Works:
Leasing a vehicle has gotten a bad reputation in the past. This is due to people talking about their bad experience or repeating what they have heard about someone else’s bad experience. However, leasing is becoming the most popular way to afford to drive the vehicle you want and still fit the payments into your budget. It is very important that your driving habits are carefully calculated and the lease structured in your best interest.
Let me explain how it works:
Leasing is based on residual value; which is basically how much the manufacturer forecast the vehicle’s worth at the end of the lease. This is purely based on market speculation and historical data trends in the automotive industry.
Terms used on a lease deal structure are:
- Money factor- Similar to interest rate but not the same.
- Residual value- Vehicle’s worth at end of lease.
- Payments are calculated based only on the amount of the vehicle you are planning to use.
- Gap insurance- Extra insurance protection if the vehicle is totaled.
- WearCare Insurance- Extra protection that will cover most dents, dings, scratches, extra interior wear. Including lost keys, crack windshields, and even tires.
Different manufacturers have different terms on what happens at the end of your lease. I will focus on Fordvehicles leasing programs:
What are benefits of leasing?
You only pay for what you use.
Protect yourself from negative equity
You can resolve your negative equity situation with your current vehicle quickly
Depending your allotted miles, you may be able to stay under warranty and save yourself from needed to purchase expensive extended warranties.
Gap insurance is included in a Ford lease so you don’t need to protect yourself if the vehicle gets totaled with extra insurance
You can stay in the most current model with the latest technology and safety options
Terms of the lease and mileage ranges:
- Ford offers a leasing program for 24 Months, 36 Months, 39 Months and 48 Months.
- Ford offers a minimum of 10,500 miles per year and a maximum of 50,000 miles a year (not to exceed 100,000 during the term). Miles are calculated at increments of 1500 up to 19,500 per year and then can be purchased up to the max. If you purchase more than the standard 19,500 per year and do not use those extra miles you can get that money back.
Who is the best candidate for a lease?
- A professional, long time employee, who has your best interest in mind and is concerned about your future business.
- A customer with consistent driving habits.
- A customer anticipating changes in their lifestyle but need a vehicle now.
- A parent looking to cosign for the young adults but doesn’t want to commit to 5 years or more loans.
What are available protections with leasing:
- Modern leases can be protected with WearCare Insurance that will cover most dents, dings, scratches, and extra interior wear. Including lost keys, cracked windshields, and even tires.
What are my options at the end of the lease?
- If you decide that the vehicle you leased still meets your needs, and you would like to own it in the end, you can refinance the remaining balance (residual value) and payoff the vehicle. This can be done with Ford Credit or a lender of your choosing like a Credit Union.
- You can bring the vehicle back to the Ford Dealership you leased it from and turn in the keys and walk away. (As long as you have finished your payments and there is no uncovered damage).
- You can come back to the Ford dealership and pick another vehicle out and choose to lease again or purchase another vehicle.
- Before the last 120 days of the lease (lockout period) you can trade in the vehicle at any time and lease or purchase another vehicle from your Ford dealership. It would be the value of the vehicle at the time of trade vs your current payoff (of the whole vehicle). Sometimes we will recommend that you do this if you have equity so we can apply it to your next deal.
Give us an opportunity to discuss your options on your next purchase at www.24autobids.com
Marisa Thompson- Leasing Specialist at 5Starford and
Internet Sales Manager