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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Len44ik/Shutterstock August 19, 2022 Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our loans reporters and editors focus on the points consumers care about most — the different types of lending options, the best rates, the best lenders, how to pay off debt and more — so you can feel confident when investing your money. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. What is a lease disposition fee
A disposition fee, or a turn-in fee, is a charge to return your leased vehicle. The leasing company charges this fee to cover the cost of cleaning up and repurposing your old car for resale. They typically range from $300 to $400, . The make and model of the vehicle, the dealership and the city, state or county that it’s located in all influence the disposition fee. The disposition fee is separate from your monthly payment but may be charged with , like early termination charges, excessive mileage charges and excessive wear-and-tear charges.
If a disposition fee is included in your , you can avoid it by purchasing your vehicle or signing another lease — or trying to remove it from the agreement before you sign. Purchase your leased vehicle. You can if your contract includes a purchase option. If you buy it, the leasing company may choose not to charge you a disposition fee since it doesn’t have to prepare the car for another buyer. Sign another lease. If you sign another lease with the same car dealership or leasing company, it may automatically waive the fee. Otherwise, you can negotiate a fee waiver when structuring the new lease agreement. Check the contract before you sign. Sometimes companies don’t charge a disposition fee. If there is one, ask for it to be waived and removed from your lease agreement.
A disposition fee isn’t the only charge you could expect to face as you’re leasing a car. Look out for other fees. Excessive mileage. If you go over the mileage you’re allotted in your lease, you’ll have to pay this penalty. Wear-and-tear. If your car has some major dings, scratches or stains, you could face this charge based on the cost of the repairs. Early termination fee. If you return your lease before your term expires, you could end up paying extra to get out of your contract. Purchase option charge. Some dealerships may have a fee if you decide to buy the car once your lease ends. Not all fees are charged or required with a lease agreement. It’s important to review your contract and ask any questions before signing. You may even be able to or remove them entirely, but you should still count on paying a few additional fees when you lease a car.
Don’t trick yourself into thinking that you can afford more than you can. Review your budget to calculate a reasonable monthly payment. Give yourself a window and try to pay off other debts and lower expenses before taking on a new lease. For instance, consider or find a cheaper cell phone plan to make room for a possibly higher car payment. If you’re having trouble determining how a car may fit into your budget, use an to see what you can afford. 3 Trim your down payment
Leasing a car is different from buying a car. If something happens to your car during your lease, your insurance company pays the leasing company the value of the car, not you. This means that the chunk of cash you put down at the beginning of your lease is lost. You’ll typically only need to cover upfront costs. But consider putting no cash down and rolling all the fees and costs into your monthly agreement if you can afford it. Ask about your current vehicle’s trade-in value if you plan to get rid of it. If it’s worth $2,000 or less, it’s fine to use that as your down payment and lower your monthly payment. But if it’s worth more, you may want to and save the extra cash for other expenses, like paying off debt or building up your savings. Leasing agreements tend to have set mileage limits — typically 10,000, 12,000 or 15,000 annual miles. If you set your mileage at 10,000 a year and end up going over, you can expect to pay an excessive mileage charge, usually around $0.30 per mile. So, if you set your mileage at 10,000 and go to 12,000, that extra 2,000 miles will cost you $600 at the end of your lease in excessive mileage fees at the usual rate. That’s not including other charges. Understand your commute and driving habits before you get into a lease. That way you can choose the option that best fits your needs. 5 Compare rates ahead of time
Your interest rate is based on your credit score and history. The higher your credit score, the lower your interest rate. If with excellent credit, you could get a lower interest rate — and a lower overall monthly payment — compared to a deal without a co-signer. Shop around and from various dealerships to find the best option.
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SHARE: Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Rhys has been editing and writing for Bankrate since late 2021. They are passionate about helping readers gain the confidence to take control of their finances by providing clear, well-researched information that breaks down otherwise complex topics into manageable bites. Related Articles