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Leased Car VS Loaned Car
The difference between a leased car and a loaned car is what happens after each of their term ends. With a leased car, you have the option to buy the car and pay for the predetermined amount or return the car to the dealer and settle the remaining balance. For a loaned car, you get to keep the car once you paid off your loan.
Isn’t it better to apply for a car loan straightaway instead of leasing it at first? – Well, it’s true but the beauty about leasing a car is that it offers a much lower monthly rate compared to a loaned car. Aside from this, if in case you change your mind about the car, then you can easily trade the car off when the car lease contract expires.
Extended Car Warranty Vs Car Insurance
One thing that you need to understand in the get-go is that a car warranty is different from car insurance. Although they both protect against repairs and car replacements they differ from what they essentially protect you from.
Car insurance protects you from spending out-of-pocket expenses from repairs against damages caused by natural disasters like floods or earthquakes and accidents.
A car warranty will protect you from paying for expensive repairs and parts replacement due to component failures or wear and tear issues.
These two protection plans offer peace-of-mind whether you’re on the road or off.
Is an Extended Car Warranty Necessary If I’m Leasing?
A lot of people are on the fence when it comes to buying an extended car warranty if they’re leasing a brand new car.
Brand new vehicles come with a factory warranty which covers against expensive repairs. Factory warranties are limited to covering only powertrain components, this means that in case you have issues with your head gasket or air-condition, you’re going to have to pay for it yourself. To give you a better idea of what you should do, consider the following conditions:
1. How long you’re planning to keep the car
If you’re planning to keep the car for more than 3 years, then it’s best to buy an extended car warranty since the factory warranty will end after 3 years/36,000 miles.
2. The mileage consumed per year
The more you’re going to use your car, the more mileage accumulates. When you’re well over the mileage limit of the factory warranty then expect to be without any coverage anymore even if you still have a year left on your plan. An extended car warranty will help you get the proper mileage allowance and many more protection plans.
3. You’re leasing a used car
Used cars don’t usually have warranties anymore. So if you’re leasing a used car without any warranty, buying an extended warranty for used cars is a smart choice.
What Happens When My Car Lease Expires?
Right before the lease expires, you have three options to choose from. You either trade the vehicle for a new lease, return it to the dealer or keep the car and pay for the remaining fees.
1. Trade The Car
Have your car traded out for a new leased car, this is very common nowadays. Even the car dealers offer this before your leased car expires because this will ensure them of your continuous patronage to the products and services they offer.
2.Return The Car
You can choose to settle the account and say goodbye to your leased car. Although this might seem very simple, you may have to pay additional fees in case you went over the allowed mileage limit.
3. Buy The Car
If you’ve grown to love the car, especially if you’ve invested a lot in keeping it in great condition, you have the option to buy it. This is what we call lease-to-own. In case you’re short on cash, you can always apply for a car loan.
Key Take-Away
Extended warranties are more than just a replacement of a factory warranty when it expires. It offers a comprehensive protection plan that is beyond powertrain coverage. Get your free quote today with A-Protect Warranty for a detailed coverage that tailor-fits your needs.