New Cars Under

The concept of a one year car lease is basically the same as vehicle leasing in general as it is designed to benefit both the consumer and the new car dealership. The arrangement typically involves a set time period for which the consumer will use a vehicle and then return it to the dealer at the end of this specified time frame.

The simplicity of these arrangements will benefit the consumer as they are not committed to any long term auto loan and the overall cost of driving the vehicle can be quite appealing as well. The benefits to the dealer are that the car generates carefully calculated payments each month and at the end of the lease they will then have the ability to sell the now used vehicle at a fair market value price determined in part by the year of the car.

Although it is not very common in the industry the one year car lease is something which we have seen and in each instance there were specific aspects of the customer’s need for a one year lease which made it the best choice for them even though the lease terms were different than a typical lease agreement.

For example a customer needs to lease a car for a year and the terms are put together, agreed to, and accepted by all parties involved. In these terms there would be a slightly higher interest rate because of the short term status of the lease. This simply means that in order for the dealer to make it fair to their bottom line the interest needs to be sufficient because after all as we mentioned earlier the one year car lease is not considered to be standard lease agreement in most cases.

As far as the in place restrictions go they will typically follow a set matrix which prescribes the allotted mileage for which the leased vehicle will be driven under the terms of the lease. These are certainly standard terms yet obviously the amount of miles allowed will be adjusted to meet the one year lease scenario.

Some dealerships will agree to offer lease options for 12 months yet the total payments will be higher than they would be on say a three year lease. This is understandable as the option to extend the lease on the car which a consumer may have right now may not be possible. This is why the option in itself is an important point to consider when a car lease is originated as it can apply to both the possibility of a lease extension and the possibility of the consumer simply being able to buy the vehicle at the end of the lease as is quite often the case.

Typically unless there were specific options such as the ones mentioned above outlined and built into the lease then a period of renegotiation will occur at or near the end of the specified lease period. It is fairly common for the customer to wish to actually extend the car lease and it ultimately comes down to the individual case by case basis.

In one scenario we observed a situation in which a customer had acquired a 1 year car lease with the option to renegotiate the terms at a certain point towards the end of the lease and they were in a position where they did indeed need to acquire an extension. The vehicle was kept in immaculate condition and they had not missed or even been late on any of their payments. This made it very easy to negotiate favorable terms for an extension which benefited both the dealership and the customer.