You can pay less if you lease, but if things are not done properly, you may end up paying too much on leasing.
What Is Car Leasing?
Car leasing is sort of like a long-term rental for your next set of wheels. Rather than buying the car outright, you agree to drive it for a set period—typically two or three years—while making monthly payments. Instead of building equity in the vehicle, you’re simply covering the cost of depreciation and usually a bit of interest.
Unlike traditional car loans, leasing means you’re only paying for the portion of the car’s value you actually use, based on the lease term and mileage limits set in your agreement. Think of it as the automotive equivalent of subscribing to Netflix rather than buying every DVD. When your lease wraps up, you hand the keys back—no hassle of reselling or worrying about future values.
But, as with any agreement, the details matter. Let’s take a look at the key mistakes to steer clear of if you want to keep those leasing costs in check. In this article, we will highlight some mistakes to avoid when leasing a car. Signature Auto Group is proud to be one of New York City’s most trusted Car Leasing Companies. We are proud to carry a 5-Star Google Rating from over 1500 satisfied Car Leasing Customers.
Common Car Leasing Mistakes to Avoid
To avoid spending too much money that you do not plan to spend, here are some lease hacking tips for you and things to avoid:
Understanding Credit Scores for Car Leasing
Before stepping foot in the dealership, it’s important to know how your credit score can influence your leasing options. Generally, the higher your score, the better terms you’ll get. Most leasing companies prefer to see a credit score of at least 620, though scores of 700 or above may help you snag the lowest interest rates and more favorable terms. Still, even if your credit isn’t perfect, there are lenders that work with a range of credit situations—just be aware that a lower score could mean higher monthly payments or a larger security deposit.
If you’re unsure where your credit stands, it’s smart to check your score before you start shopping. Credit agencies like Experian, Equifax, and TransUnion can provide this information, helping you avoid surprises and negotiate confidently when you’re ready to lease.
Typical Length of a Car Lease
When considering a car lease, it’s helpful to know what kind of timeframe you’ll be working with. Most car leases are structured to last anywhere from two to three years, or approximately 24 to 36 months. This duration strikes a balance—it allows you to enjoy the latest features and technology, without the long-term commitment of traditional car ownership.
If you find yourself needing a little more time at the end of your lease, many companies offer the flexibility of a lease extension. This can be handy if you’re still weighing your options, perhaps considering whether to purchase your current vehicle or start fresh with a new model. Lease extensions can also give you an extra buffer while searching for a car that fits your needs perfectly.
Paying Large Down-Payments Upfront
The month-to-month lease payments that car dealers usually advertise on new cars are low. But, before you can get that low payment, you may need to pay a huge amount of money upfront.
Leasing typically doesn’t require a down payment. However, making one is a good idea if you want a lower monthly payment. The larger your down payment, the lower your monthly payment will be. Still, it’s important to remember that you’re not required to put money down on most leases—so be wary if a dealer insists it’s necessary.
If the vehicle eventually gets stolen or wrecked within a short time after leasing, the company will be reimbursed by the individual’s insurance company. But, just have it in mind that the huge amount of money you have paid upfront has gone. You will not have a car, neither would you have your money back.
If you want to lease a car, it is advisable that you do not spend over $2,000 upfront. Sometimes, it might be better not to pay any upfront fee and include them in your month-to-month lease payment so that if something eventually happens to that car before the lease term ends, the company will just be with a little fraction of your money. money.
In summary: while a larger down payment can shrink your monthly bill, it’s often smarter—especially for protection against the unexpected—to keep your upfront costs low or even at zero and fold those fees into your lease payment. This way, you reduce your risk and keep your money working for you, not just sitting in someone else’s pocket.
Not Purchasing Gap Insurance
Whenever you lease a car, ensure that gap insurance is paid for. What we refer to as ‘gap’ is the distinction in the amount that you owe your leasing company for the leased car and the car’s value.
Let us just assume that in your contract, it is stated that you have an option to buy the car at a price of $13,000 after completing your lease term. If you take the time to total the vehicle before the expiration of the lease, the amount will be paid to the car dealership by your active insurance company after determining the car’s current value.
If your insurance company concludes that the current market value of the car is just $9,000, then you will probably pay an out-of-pocket sum of $4,000 to cover any difference between the current market value and the residual value of the lease contract. But, if you have paid gap insurance, the difference will be covered by the coverage (gap coverage).
Underestimating the Number of Miles Per Year for Your Lease
The mileage limits (yearly) of leasing contracts can be 15,000 miles, 12,000 miles, or 10,000. If you go beyond those limits, then you might be asked to pay about 30¢ per extra mile after the lease.
So, before you lease a car, you should be very aware of how you drive so that you will not end up paying extra charges. Consider the distances that you drive and also where you drive to every day. If you are sure that you might drive beyond the mileage limits, then you can just ask to get a higher limit.
Not Planning for Car Maintenance
The leasing company will inspect the car after the lease terms, and if they find some damages, then you would be asked to pay additional fees. So, to avoid such, you should try as much as possible to be careful with the vehicle, even though there might be some scratches or wear that can be defined as normal use.
Trading In Your Current Car When Leasing
A very common question we hear: Can you trade in your existing vehicle when you start a new lease? The answer is yes—you can absolutely trade in your current car, and the equity or value of your trade-in can help lower the amount you put down on your next lease.
When you bring your vehicle to the dealership, they’ll assess its current market value (using sources like Kelley Blue Book or NADA Guides) and apply any positive equity as a credit toward your new lease. This means your trade-in can reduce your upfront costs or even lower your monthly payments.
Just remember: if you owe more on your old car than it’s worth (negative equity), that amount may be rolled into your new lease, potentially increasing your payments. So, it’s a good idea to check your payoff amount and research your car’s value beforehand to make sure you’re making the most of your trade-in.
If you follow the above-mentioned tips, you will save yourself some money when leasing your next vehicle. If you want to learn more about how to lease a car, you can get more information on our website. Signature Auto Group aims to provide best deals on Car Leasing in New York City.
Leasing a Used Car – Is It Possible?
While leases are most commonly associated with new cars, it is possible in some cases to lease a used vehicle. Typically, car manufacturers and their financing arms—like Toyota, BMW, or Lexus—occasionally offer what’s called a “Certified Pre-Owned Lease” on their late-model, pre-owned vehicles.
However, bear in mind that used car leasing isn’t as widely available as new car leasing. The terms may be a bit different, and the selection is often limited to luxury brands or high-demand models in major cities like New York. If you’re interested in this route, check with local dealerships to see if they offer certified pre-owned leasing programs.
Remember, before you agree to any lease—new or used—review the contract, check for mileage limits, and make sure you fully understand the condition standards at lease end. That way, you can make the most informed decision for your situation.
Signature Auto Group New York City Trusted Car Leasing Company
As a company we learned a long time ago just how significant it is to have talented, loyal and motivated staff to serve our clients in every aspect; before, during and of course even after such an important vehicle purchase. Even though this will always be an ongoing process, this organization has been fortunate to have attracted and retain such extraordinary individuals at every single level in this company.
We are honored to serve all Signature Auto Group clients past, present and future clients in the major areas of the United States and around the rest of the world. Signature wants their customers to enjoy life to its fullest. We also have high standards that the staff agrees with and are committed to providing you with the service you deserve. The sales staff is extremely knowledgeable about our products and is there to get you the fantastic vehicle that you want and desire. Come on in and check out our extensive inventory that includes all the latest makes and models of vehicles. It doesn’t matter whether you are wanting to purchase or lease; we have the perfect plan for you. And don’t forget to check out our specials, we are always having great lease specials on a lot of the new vehicles in stock.
