5 Common Mistakes to Avoid when Leasing a Business Car

Lease a business car

When leasing a car for business purposes, it’s important to know what you’re getting into and the pitfalls you need to avoid. Here are five common mistakes people make when leasing a car, and how you can avoid them.

Putting too much money down on the car

It might be tempting to put down a large payment up front, so you can take advantage of lower monthly payments for the rest of the lease. But if the worst happens and you get into an accident, you likely won’t have your down payment refunded. This can leave you not only without a car, but also out of pocket. Don’t go with the first dealer you find, either – use a lease broker such as ICL to help you find the best deal.

Not having gap insurance

Gap insurance is essential when leasing a car, and you should find out from the dealer when you negotiate a lease whether it is included. If not, you will need to arrange it yourself. Gap insurance protects you if you have to make a claim – your regular insurance will only pay out what the car is worth at the time. If the car has depreciated in value this can be less than your lease is worth, meaning you will lose out. Have a look at our article to find out how you can help combat car depreciation.

Underestimating mileage

When you arrange to lease a car, you will be asked to estimate your annual mileage. Be honest with the dealer about this as it can end up more expensive to underestimate – if you go over the mileage limit you will be charged for the excess. Find out how much the per mile excess rate is before you sign, and make sure you don’t go over the limit you agree to.

Not taking care of the car

Normal wear is expected but you should also take good care of the car, keep it clean and have any damage fixed or you’ll be charged a fee at the end of the lease. Find out when you meet the dealer what is considered normal wear, and what the cleaning and damage charges are like so that you don’t end up with a huge bill. There are many good tips online for what to do if you find your wear and tear charge seems too high.

Focusing on the monthly payment

Have a budget in mind and make sure you keep to it – but be aware that there are other charges and things you will have to cover over the course of the lease, like repairs and maintenance. If you lease the car for a longer period of time, this will reduce the monthly payment – however, this also means that warranties on the car will often expire. Not only that, but with the pace of technology continuing as it is, you may miss out on certain improvements and updates.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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