There’s a lot of misinformation about car leasing that floats around, so don’t take your neighbor’s or your cousin’s word for it. Get the facts from a reliable source.
Here are three common misconceptions:
- Anyone can lease a car. Incorrect! You have to have an excellent credit score in order to qualify for a lease, especially for the best new car lease deals on the market. In some cases, it’s more difficult to qualify for a lease than for a car loan. If your score is low, you may want to buy an inexpensive used car or wait until your credit history is in tip-top shape before you attempt to lease the vehicle of your dreams.
- You can walk away from a lease. Not always. You can only walk away if it’s a closed-ended lease. If it’s an open-ended lease, you're obligated to purchase the car at the end of your lease. Don’t sign any paperwork without knowing which type of lease you’re getting.
- You'll pay the same insurance rate whether you buy or lease. Nope! Leasing companies usually require you to have more than the state-required minimum liability coverage, which costs more. You may also be required to carry GAP (Guaranteed Asset Protection) insurance, insurance that covers the difference between the actual value of the car and the balance owed owed on it.
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