Leasing 101 New Braunfels TX

When you lease, you are paying for the use of a vehicle.

Local Companies

Eagle Diesel
(830) 609-6608
292 Hubertus Rd Unit 1
New Braunfels, TX
Chacon Suzuki
(830) 624-7000
3566 Ih 35 S
New Braunfels, TX
Red Carpet Auto Sales Co
(830) 620-0125
513 S Business Ih 35
New Braunfels, TX
Practical Rent-A-Car
(830) 606-3463
547 S Seguin Ave
New Braunfels, TX
Rush Enterprises Inc
(830) 626-5200
555 S Ih 35
New Braunfels, TX
Bullseye Motors Inc
(830) 620-6633
1750 S Business Ih 35
New Braunfels, TX
New Braunfels Auto Sales
(830) 629-6200
5189 S 35th
New Braunfels, TX
Discount Auto Sales
(915) 859-3906
7973 Alameda Ave
El Paso, TX
Pye's Auto Sales
(281) 446-2135
6303 F M 1960
Humble, TX
Glz Auto Sales
(956) 726-6319
601 Market St
Laredo, TX

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Understanding Leases

When you lease, you are paying for the use of a vehicle. Your payments cover the cost of the vehicle's depreciation over the time you drive it, rather than the purchase price. When the lease is up - typically in two to four years -- you must return the vehicle or purchase it outright. This article will explain what you need to know if you're considering a lease. Before you make your final financing decision, you should also review our articles on loans and the differences between loans and leases.

 

How lease payments are calculated

To calculate a lease payment, the financial institution (the "lessor") estimates the amount the vehicle will depreciate over the lease period, adds the interest being paid by the lessor to finance the car while you drive it and several other fees. Many leases can be started with 'no money down,' although a down payment ensures lower monthly payments.

The Federal Reserve Board recently enacted consumer-friendly legislation that requires dealers to disclose all the key variables of a lease: the interest rate, residual value, length of lease, and size of down payment.

 

The two- to three-year lease

Short term leases work for those who want a brand-new vehicle every few years. The manufacturer covers major maintenance costs for the duration, and you usually pay for required servicing. A major concern: if you terminate this type of lease early, you'll most likely pay severe penalties. Returning the car when the lease is up When a lease expires, you can either buy it, or return it. If you return it you must do the following:

  • Return the vehicle in its original state with no accessories, modifications, or different parts.
  • Make sure the vehicle is in good shape, with no excessive "wear and tear." There are penalties for damage or rough treatment.
  • Meet mileage limits, usually around 12,000 - 15,000 miles. You will be charged anywhere from 10 to 15 cents for every mile you drive over the limit, which can really add up. For example, if you drive 20,000 miles per year for three years on a 12,000 mile/15 cent lease, your penalty would be $3,650.
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