What It Means to Lease a Toyota
When you’re in the market for a new vehicle, leasing a Toyota is one option that continues to grow in popularity. It offers many benefits and it’s more affordable than many people realize. One of the main reasons people prefer to lease is that you have the option of driving a new vehicle every couple of years but it has other benefits, too. While leasing a Toyota has many benefits, many people shy away from it because they don’t really understand what it means to lease a vehicle or how the payments work.
Understanding the Payments
Determining how much your monthly payments are for a lease is different from the way payments are figured for buying a new Toyota. This is why the down payment and monthly payments can often be a lot less than they are when you buy a vehicle. The payments for your lease are determined mathematically based on the value of the vehicle and the length of the lease agreement.
The dealer will begin with the capitalized cost and estimate what the value of the Toyota will be at the end of your lease agreement, which is your residual value. The difference between the capitalized cost and the residual value is the amount of money that’s financed and this is what determines your down payment and your monthly payments.
Your credit score will also determine the terms of your Toyota lease. The better your score, the more discounts and special deals you can get. For example, with an excellent credit score, you may be able to lease a vehicle without a down payment.
Why You Need Gap Insurance
Sometimes having gap insurance is required and other times it’s optional, it just depends on the dealership and the vehicle being leased. Even if it’s not required, it’s a good idea to get this insurance. Gap stands for guaranteed asset protection and it covers what your regular insurance may not. For example, if you are involved in a wreck and the vehicle is totaled, this insurance will pay the rest of the payments in your lease, even if it happens shortly after getting the Toyota. You never know what might happen when you’re on the road and gap insurance offers added protection and peace of mind.
Read the Fine Print
As a rule, always read the fine print before you sign any lease agreement. If there is anything that you don’t understand, find out what it means before you sign. The fine print contains important details such as exactly what is meant by excessive wear and tear, so there will be no misunderstandings later. It also includes interest rates, the residual value, depreciated amount, taxes and more.
You do need to be aware that additional fees can be added at the end of the lease if the vehicle has incurred excessive damage not related to regular use or if you go over the miles allowed in the lease agreement. This is why it’s so important to make sure you completely understand the agreement before you sign and that you read the fine print. You have special responsibilities when leasing a vehicle that you won’t have when buying. All of this will be explained in the contact but you have read everything to understand what is expected of you.
There are certain restrictions involved in leasing but there are also many benefits that you won’t get when you buy. Once you understand what it means to lease a Toyota, you can better decide if it’s the right choice for you personally.