Car Leases to Car Sharing

Okay, car leasing companies aren’t going anywhere, but here is a new movement in the car leases industry that is rapidly gaining momentum.

In San Francisco, a new car sharing company called SprideShare is intent on allowing users to share each other’s cars for $5 to $8 per hour. State law is a current impediment to the car sharing dream. But a new bill will allow insurance companies to legalize car sharing, and if it passes, it may become law.

The average car sits idle 90% of the time, but this for profit company wants to change the way cars are used. If the pilot program succeeds with around 30 cars, it will continue to grow. Currently, City CarShare is a non-profit San Francisco group that has 325 cars, and looks forward to the expansion of car sharing into suburban areas.

Today there are already a few car sharing companies out there – Relay Rides of Baltimore and soon moving to Boston, Whipcar in London, and Gettaround in San Francisco, which supports the bill.

Maybe one day, in an entirely sustainable community, no one will actually own a car, and car leases will go by the hour. Maybe.

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Buying vs. Leasing a New Car

Buying a new car is expensive. Leasing a new car is not. Leasing a car is a great idea for short term drivers, i.e. three years or less. This is because you wind up not shelling out as much money as you would for a new car – the catch is, you don’t have any car after that.

When you buy a new car, you pay a lot of cash out of pocket, and the value of your vehicle depreciates with every mile driven. But for the long term, it’s not so bad, because once the car is paid off, it’s yours, and it still retains a minimal value. For the short term, however, leasing a car saves you more money than buying a car.

Car leases are a great way to try out a new car, or to have a car if you can’t afford a new car, and don’t want to buy a used clunker. So if you find yourself in this spot, think about a New York lease. Brooklyn car especially are great to try out for short term, and with no commitment, you simply give them back at the end of the lease. It’s a lot like buying a house versus renting an apartment. You choose which you would rather.

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Lease New Cars: Do I Need Gap Protection?

Standard in most car leases, gap protection will cover your expenses if your vehicle is stolen or destroyed during the term of your lease. Depending on your circumstances, this could save you thousands of dollars.

How? Let's say your car gets totaled when you owe $7,500 on your loan, but the insurance company determines the value of the vehicle to be only $5,000. The insurance money can go to your loan payments, but that still leaves a $2,500 gap in the money you have and the money you owe.

Car lease deals with gap protection will cover any discrepancy between your vehicle value and your loan. Without gap protection, your situation will be treated as an early termination — kind of like when you try to cancel your cell phone or cable service before the contract is up.

Although certain safety precautions can help you minimize your risk, car accidents and thefts are impossible to predict or rule out entirely. For this reason, it's important to protect yourself and only lease new cars with contracts including gap coverage.

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Finding the Best Car Leasing Companies

If you’re thinking about leasing a car, choosing a dealership is just as important as selecting a make and model. Read on for some qualities to look for in potential car leasing companies.

Variety
Whether or not you have an idea of the type of car you’d like to lease, it’s best to do business with car leasing companies offering a variety of makes and models. In addition to providing you with plenty of options, a wide selection indicates that a dealership has a certain level of experience within the industry.

Financing
Just like makes and models, you want to keep your financing options as open as possible. Look for car leasing companies with flexible financing and special offers. At the same time, make sure your dealership has sufficient credit criteria to guarantee financial stability.

Service
Even if you’re looking to lease new cars, chances are you’re still going to need some maintenance and repairs over the course of your lease. For this reason, it’s important to find car leasing companies that provide on-site service. Your specific service needs will depend on your schedule, type of vehicle, and how many miles you expect to drive.

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Car Leasing Deals: It’s All About the Invoice

When buying or leasing a vehicle, you never have to pay the MSRP value. Still, studies have found that as many as one in seven U.S. car buyers think the list price is a fair price. If you’re looking for car leasing deals, it’s important to consider the factory invoice of your vehicle – how much the dealer had to pay to own the car.

The difference between the list price and invoice price represents the dealer’s potential profit margin. It’s also the space you have to negotiate a better price.

Experienced car buyers and leasers look up vehicle invoice prices online and negotiate up from the invoice, not down from the MSRP. A larger margin often suggests that your dealer will be more willing to lower the price – to guarantee a successful negotiation, restrict your search to cars with higher margins.

Car leasing companies will sometimes even consider leasing a vehicle for below its invoice price. This is because dealers are often eligible for rebates and special interest payments called holdbacks from the manufacturer, allowing them to negotiate below invoice and still turn a profit.

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The Best Brooklyn Cars to Lease

When it comes to cars, most people know what they like. This could be leather seating, mobile video, iPod compatibility, or simply ample cup holders. It’s obviously to important to find a vehicle with the features you desire, however leasing a car should add an extra dimension to your search.

Why? Your leasing expenses will be determined by your vehicle’s residual value: how much your dealer expects it to be worth at the end of the lease. No one can predict the future, but it’s still important to factor in the resale values of the vehicles you’re considering.

For example, you should avoid vehicles by companies that have had to order large recalls in recent years. This decreases people’s confidence in the make and will likely result in a lower residual value. Additionally, it’s best to pass up car models that are frequently redesigned. This can also decrease your resale value, as a new design will make your vehicle seem dated.

Overall, it’s important to lease Brooklyn cars with historically high resale values. Then you can start thinking about cupholders.

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Cars Leasing vs. Cars Renting

Although we might use the words “lease” and “rent” interchangeably in everyday conversation, car leasing and car renting are actually incredibly different processes. Car rentals are intended for short-term borrowing only, while car leasing deals typically last for 24 months or longer.

Car Leasing

Some people compare car leasing to apartment leasing, but this can be confusing, since apartment renting and leasing are incredibly similar. It’s better to think of car lease financing as similar to mortgage financing – only instead of money, car leasing companies are loaning you a car.

Just like loan money, you have to “pay back” (or return) your car at the end of the lease. You also have to pay interest on the loan and cover the vehicle’s estimated depreciation in value. This money comes out of your initial deposit and monthly payments.

Car Renting

Whereas car lease deals are calculated based on vehicle value, estimated depreciation, interest rate, and lease duration, car rentals are not determined by any one set of factors. Rental prices vary by company and season by formulas not known to the general public.

Because of the unreliable financing, car rentals are best used by travelers or people in need of specific types of cars for short-term use (i.e., a larger car to accommodate multiple family members). If you’re looking to borrow a car for an extended period of time, cars leasing is really the way to go.

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