What You Need To Know About Car Lease In New York
Nearly one-quarter of new cars in New York are sold under lease agreement because it is much cheaper to lease than to buy the car. If you consider owning a car, then in this article are some of the things you need to know about car lease in New York. For those who don't know what car lease in New York is, car leasing is a long-term rental agreement between the leaser and the Lessor over an agreed period of time and also the miles to be covered, and there are basically two types of car leasing agreements which are;
Personal contract hire: This has to do with the difference between the current value of a car (value of the car when it was given) and the value of the car at the end of the period of the agreement. It means that your fixed monthly payments are based on the expected depreciation of the car. Your monthly payment should include maintenance and road tax which will definitely reduce tax for you rather than paying for them separately.
Personal contract purchase: This gives you the opportunity to buy the car outright after the expiration of your lease agreement. At the end of the lease period, if you decide to keep the car you will have to pay a certain amount of money after which the car will be handed over to you. But personal contract purchase is more expensive than personal contract hire.
Benefits of Leasing a Car in New York
Car leasing is more beneficial and affordable than buying a car, although it is a long-term contract. There are a lot of benefits you can get when it comes to a car lease in New York. Some of which are;
Lower cost of repair because the contract or the warranty will cover it
Compared to buying a new car, you will pay a lower cost monthly
There is nothing like down payment, that is to say, you don't make down-payment.
Some Contract Terms and Length of Lease
The period of leasing a car last between two to four years, and below are some of the contract terms used in leasing cars.
Depreciation: This has to do with the reduction in the value of the car over the months and miles you will be driving.
Residual value: when a car is returned, the car will still have to look valuable to the owner. No wear and tear, the car has to be in a good condition. The higher the residual value, the lesser the depreciation value.
Monthly lease payment: This is the amount agreed to be paid every month for the car.
Gross capitalized cost: This is the original price of the car.
The interest rate or money factor: This is the interest rate for the price of the car. It is expressed annually in percentage.
The risk involved in a car lease in New York
It is important to take good care of the car to avoid extra charges like maintenance fee; the Leaser bears the full cost of maintenance for the car when the car is in his custody. Also, the agreement can add additional fees such as lease drive-off fees and return fees. Lease drive-off fee is the deposit someone makes at the beginning of the lease. It also includes the first-month payment.
Car Lease New York