Questions to Ask Before Leasing a Car

Leasing a car can help you get behind the wheel of brand-new models with the latest technological innovations. Many drivers choose to lease a vehicle they may or may not be able to afford via financing. However, leasing a car isn’t always the right choice for everyone. Before signing any lease agreements or negotiating money factors, ask yourself a few key questions. 

Ultimately, a FINN car subscription offers a convenient and flexible solution if leasing is too risky or expensive for your budget. FINN’s monthly subscription fee bundles insurance, registration, depreciation, and maintenance. You can also choose from many makes and models, subscription length terms, and mileage allowances. Subscribe to your new car with FINN. 

7 questions to ask before signing a car lease 

The list of questions to ask before signing a car lease should kickstart your thinking and help guide you in clarifying the terms of your lease agreement. If you have any additional questions or require clarification, speak up. It’s better to confirm details than assume and find out the opposite is true. 

1. What terms should I know before leasing a car?

Leasing terms remain critical information you should know before you even step foot on a dealership lot. Examples of terms you should know before you sign include capitalized cost, open vs. closed-end leases, mileage cap, MSRP, and a car’s residual value. You might also investigate what lease fees apply, what down payment is typically required, and how to decipher the fine print to avoid paying more for your lease.

Ask yourself what the residual value on a car lease is. If you don’t know the answer, take some time to educate yourself. What you learn could help you negotiate a better lease contract, even if you can’t take advantage of leasing specials.

2. What credit score do I need to lease a car? 

Knowing your credit score before you go into a lease agreement can help you check in on your finances and discover what money factor (interest rate) and related terms you can qualify for based on your credit report. A higher credit score will get you a lower money factor, so you pay less interest on leasing. However, your credit score is only one piece of the larger financial puzzle that dealerships use to build your lease agreement. 

3. What restrictions and fees come with leasing a car? 

Your monthly payment is one of many costs of leasing a car. Before you lease, you typically put down a predetermined amount that covers various fees associated with leasing. At the end of your lease, you must also pay a disposition fee. You face additional charges if you exceed the number of miles included in the lease or if the car is in worse shape than normal wear and tear. 

4. How do I qualify for a $0 down lease?

Qualifying for a $0 down lease requires investigating any deals that local dealerships may offer based on criteria most aren’t keen to publish. Obtaining a $0 down car lease typically requires an excellent credit score and financial worthiness, such as a low debt-to-income ratio or other measurement of financial health. However, it’s worth inquiring if you qualify for a $0 down car lease to potentially get a better lease deal. 

5. Can I return my leased car if it has problems? 

If your leased vehicle is experiencing mechanical issues, speak to the leasing company to determine the appropriate solution. If you’re involved in an accident with your leased car, call the leasing company after you’ve called the police and your insurance company. If the vehicle has problems based on something you did or damage you caused, the leasing company will likely charge you for repairs. 

6. What kind of insurance does a leased car require? 

Most leasing companies and dealerships will indicate what type of car insurance coverage you must carry, as they hold ownership of the vehicle. In most cases, you must demonstrate proof of sufficient car insurance coverage before leaving the dealership. Generally speaking, leasing companies require more than the state minimum insurance requirements to protect their investment. 

7. Can you extend a car lease? 

You can extend a car lease if the leasing company or dealership consents. If you plan to extend your lease, giving the leasing company as much time as possible in advance can help your chances of gaining an extension. Extending your lease can help you better arrange your finances for a new transportation solution or just give you extra time to fix and drive the car. 

Car leasing pros and cons

One of the best questions to ask yourself before entering into a lease is, “What pros and cons exist?” Use the table below as inspiration for your own pros and cons list, which may include personal pros and cons that leasing offers you: 

If you plan on purchasing a car after your lease ends, you might wonder if you should lease and then buy a car. Incorporating the option to purchase your leased vehicle into your lease agreement can allow you to potentially buy a car you’re already familiar with for less. However, not all automotive manufacturers, leasing companies, or dealerships allow you to purchase your lease. 

Is leasing a car right for you?

Car leasing might be right if you want to drive the latest cars and don’t want to worry about keeping a vehicle beyond two or three years. Lease agreements allow drivers to experience what it’s like to drive and own a particular model, so you can try out a vehicle before making a purchase. The factory warranty often covers maintenance intervals for most leases, so car ownership costs tend to be lower with leases than with financed vehicles. 

Alternatively, leasing may not be the best option if you want to invest in a car to have some collateral if and when you decide to upgrade to another vehicle. When you finance or purchase a car outright, you can also customize it and drive it as many miles as you like. For many drivers, leasing can cost more than financing a car in the long term, so buying might make more financial sense than leasing. 

If thinking about the differences between owning/financing and leasing a car makes you feel uneasy, consider a FINN car subscription instead. FINN covers your car-related expenses with an affordable monthly payment that includes insurance, registration, depreciation, and maintenance. With FINN, you can choose from flexible terms and mileage limits to fit your lifestyle.