What Does It Mean to Lease a Car?

Leasing a car means you're paying to use a vehicle for a set period, typically 2-4 years, without owning it. You'll makemonthly payments based on the car's depreciation and must return the car or buy it at the end of the lease.

Leasing a car is essentially a contractual agreement where you get to use a vehicle for a fixed period, often between two to five years, without owning it. Instead of buying the car outright, you make monthly payments that are calculated based on the car's projected depreciation over the lease term. You may also be required to make aninitial down payment to lower your monthly costs.

During the lease period, you must maintain full-coverage auto insurance on the vehicle. This ensures that if any damages occur, they will be covered, protecting both you and the leasing company.

At the end of the lease, you have a few options: you can return the car to the dealership, buy it at its residual value, or exchange it for another leased vehicle. Keep in mind that leasing doesn't build equity, so unlike buying, you won't own the car or receive any money back when the lease ends.

Leasing differs from buying because you don't own the car at the end of the agreement. While leasing often means lower monthly payments compared to financing, it's usually more expensive in the long run since you're not building any equity. However, most leased vehicles are still under warranty, covering costly repairs during the lease term.

Curious about leasing options? Visit Auto Bandit to find the best deals and learn more about how leasing can work for you!