Leasing in Illinois is now easier than ever! New Tax Laws in Illinois means that you are no longer charged tax on the full vehicle MSRP when you lease! This makes leasing even more affordable than it was before! Schimmer Hyundai has several leasing experts ready to help you through understanding just what it means to lease a brand new vehicle at a much smaller monthly payment!
WHAT IS LEASING?
Leasing has many benefits, one of which is that it allows you to get a BRAND NEW vehicle every 2 to 3 years, while also giving you a variety of options during your lease that you can choose to take advantage of. Let us explain these options...
OPTION 1) You can purchase your leased vehicle AT ANY TIME during your lease term.
Your lease vehicle will always have what is called a "Buy Out" Option. As you make your monthly lease payments, the Buy Out price will reduce. This Buy Out option is just that --- it means you can buy your lease vehicle. The Buy Out price is generally the selling price of the vehicle MINUS the lease payments you have made. That means you can buy your lease just as if you had bought it from the day you drove it off the lot! YES - You can fully own your lease vehicle at any time! Simply secure either bank/credit union financing, or pay cash in the amount of the "Buy Out" price!Â
Think of a lease as an extended test drive! You can DEFER the commitment to buy your vehicle until you are SURE it's the one for you! Even if that means driving it for a few years! Many people's living situations change. What if you purchase or finance a new vehicle, and than suddenly the vehicle is no longer what you want or need? You will take a loss on it trying to sell or trade it in. But with a lease, your commitment is lessened.
OPTION 2) You can TRADE-IN your leased vehicle AT ANY TIME.
What? You mean, you can "trade in" a leased vehicle, as if it is your own vehicle? YES! Regardless if it has equity or not!
Automobiles are typically depreciating assets. That means that they lose value over time. The value of any given vehicle is dependent on how many miles you have driven on it and the wear and tear the vehicle has sustained, but mostly it's determined by the current market for your vehicle. Some vehicles go down in value more than others because of economic changes, changes in gas prices, or perceived reliability of a vehicle. And what about a vehicle actually appreciating in value? YES, it happens for the SAME reasons! One example is the gas price crisis of 2008. When gas prices were above $4 a gallon, many big trucks and SUVs lost a lot of value, and smaller, economical vehicles went up in value!
So, what happens when (during your lease period) your lease vehicle is worth more than then the remaining BUYÂ OUT amount owed (Remember that? It goes down with every lease payment you make)? That is equity that YOUÂ can take advantage of! This is especially true at the end of a lease period - Depending on market, your lease might just be worth MORE as a trade in than it would be for you to let the lease expire! Our recommendation is, if you lease, to come in a few months before your lease term ends and HAVEÂ YOURÂ LEASEÂ APPRAISED! Find out if it has any equity! If it does, WEÂ CANÂ HELPÂ YOU get this equity back! How cool is that?
OPTION 3) Return your Lease Vehicle at the end of the Lease Term.
The third option you have is, to simply return your lease vehicle at the end of the lease term. Why would you ever choose this option? Well, remember the part where we said that vehicles are typically depreciating assets? This is the BEST part of leasing --- YOU ARE PROTECTED 100% FROM AN OVER-DEPRECIATION OFÂ YOURÂ LEASE! Remember how we mentioned the gas crisis of 2008? Those people who had financed big trucks and SUVs suddenly scrambled to trade in, or "get out" from their vehicles. Many were faced with a $10,000 loss in value, all because of the price of gas! But what about people that leased? They were COMPLETELY SHIELDED from those losses! All they had to do was continue to make their monthly lease payment and WAIT until their lease term was completed, in which they simply returned the vehicle to the dealership, thus washing their hands of any losses!
Lets say you do what we recommended --- you have your lease appraised a few months before the lease term is up. What if you find out your lease vehicle is worth LESS than the Buy Out option amount - Why would you buy or keep an asset that is worth less than it's current value? A couple hundred dollars is one thing, but what if your lease vehicle has lost thousands of dollars in value, simply because of market changes? When you lease a vehicle, YOU are NOT responsible! And it gives you the option of not having to buy or own a vehicle that has suddenly and drastically lost value! All you have to do is simply wait until your lease is over! You return the keys, and no matter HOWÂ MUCH value your lease has lost, it's not your problem!
Leasing offers many great benefits - So you might be wondering what are some negatives? What about "The Fees" you were warned about, you might be asking - Have you been told by your grandfather about how leasing costs thousands of dollars extra that no one ever tells you about? Did you see advice in a magazine on leasing, only to be told it's a "Rip off"?
This is as simple as we can put it: Leasing will ONLY cost you the initial upfront costs (such as any required money down or any required upfront payment of taxes or fees) - Other than that, you are only responsible for the monthly payment! THATÂ IS, as long as you drive within the given mileage of your lease contract, AND you do not excessively damage the lease vehicle while you drive it!
This is important! You DO have to care for your lease vehicle - as if it was your own! That includes having insurance on it, repairing any accidental damage, and keeping it maintained with regular service. A small scratch here or there will most likely NOT incur any charges to you, but a giant dent in the door probably will! Also, you are responsible for Tire Maintenance! So if the tires are worn down excessive, when you return your lease, you may be held responsible for the cost of new tires.
What about if you drive over the yearly mileage limited? When you lease, you have a yearly mileage allowance, typically 15,000 miles. ONLY if you return your lease vehicle at the end of the lease will the mileage be checked! So, even if you accidentally drive over the mileage in the first year, but managed to stay under the mileage the next two years, you won't have to worry! And besides, lets say you do drive over the yearly allotment of miles --- if you BUYÂ or TRADEÂ IN your lease vehicle before the end of the lease term, your problem is SOLVED! You only face a mileage penalty if you complete the lease contact and return a vehicle with mileage OVER the total yearly allotment!
DON'TÂ MAKEÂ AÂ LEASINGÂ MISTAKE! Feel free to consult us with any questions or concerns!