A Kia Forte Lease: Everything You Need To Know
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These days, the compact sedan market isn’t as popular as before. For instance, manufacturers like Chevy and Ford have discontinued their respective Cruze and Focus sedans to focus more on SUVs and trucks. With the segment being less saturated, some small sedans like the Kia Forte are able to stand out.
The Kia Forte offers handsome looks, a strong fuel economy, and plenty of features for the money. If you’re interested in the Kia Forte but can’t quite commit to buying it, leasing is a good option to consider. With more than 26% of newly-bought vehicles on lease in the United States, it’s clear that leasing has broader appeal with consumers.
Before you visit your local dealership to get a Kia Forte lease, there are things you need to know to ensure the best experience possible.
The Basics of a Kia Forte Lease
Think of a Kia Forte lease like a pay-for-use contract.
You get to drive the Forte for a certain time period and then return it once the lease expires. Essentially, you’re getting into a long-term rental agreement with the lessor (the company leasing the vehicle). Like with standard car loans, you need to make monthly payments, but it doesn’t lead to you owning the Kia Forte (unless you exercise the purchase option).
In a car lease agreement, you’re paying to cover the Forte’s estimated lost value (depreciation cost) during the term (duration) of the lease - plus interest, taxes, and fees. While it sounds simple and easy, there’s a lot that goes into a leasing deal.
Moreover, a Kia Forte lease can’t be easily terminated without incurring steep penalties. In addition, mileage restrictions and wear and tear guidelines are put in place to ensure the Forte is in good condition when it’s time to return.
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Why is Leasing a Kia Forte Cheaper Than Buying?
One of the hallmark benefits of leasing is that it’s a cheaper alternative to buying a car - at least as far as monthly payments are concerned. Since your overall payment is calculated to cover the Forte’s depreciation cost, monthly lease payments tend to be lower than a traditional auto loan.
To illustrate, let’s say you’re buying a 2022 Kia Forte with an MSRP of $20,000 and with a down payment of $3,000. If you get an auto loan for 5 years with 5% APR (interest) from the bank or any other financial institution, you’ll have to pay $340/month, including taxes and interest, to purchase the Forte.
Meanwhile, if you lease a Kia Forte instead, the numbers will be a bit different. Again, let’s assume you’re leasing a 2022 Forte with the negotiated price of $20,000. After a 3-year lease, let’s say the Forte’s residual value (estimated value of the car at lease expiration) will be $12,000 with the money factor (interest rate) at 5%. The difference between the negotiated price and residual value is $8,000.
With an upfront payment of $2,000, the remaining $10,000 will be divided over 35 months of payment (upfront costs usually cover the 1st month). With 5% sales tax and 5% money factor, you can expect to pay $240, including some fees. NOTE: These numbers are far from realistic and were only used for the sake of simplicity.
As you can see, with a Kia Forte lease, you’ll pay $100 less than when you buy.
However, there’s a catch. When you buy a car, the monthly payments stop coming once the vehicle is paid off - plus, you can recoup some of your money if you sell. Meanwhile, when you lease a car, you have to return the vehicle and be left with nothing. If you want to keep driving a car, you have several options: take on a new lease or purchase the vehicle. Either way, you’ll be back on making car payments.
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What to Do Before You Get a Kia Forte Lease?
Here are a few critical steps that you need to do before leasing:
Consider your credit
According to Experian, leasing companies usually look for a credit score of 700 or better, which falls into what the FICO considers as “good” credit scores. However, you may be able to get a lease with a lower score, but you may have to settle with a lower-priced model or trim.
Before you apply for a lease, make sure that your credit score is in order. If you have issues or negative mistakes on your credit report, make sure that you dispute them to improve your score.
Make sure a Kia Forte lease is right for you.
While leasing is a viable way to drive a car, it’s not the right option for everyone. Car leasing has its unique benefits and drawbacks. Some benefits include lower monthly payments, repair, and maintenance coverage, and you get to drive a new car.
On the flip side, leasing has disadvantages that can be a dealbreaker for many customers, such as no vehicle ownership, mileage restrictions, and potential wear and tear charges. Weight the pros and cons of leasing to determine if it’s the right choice for you.
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Shop around for the best lease offers and deals
You’re doing yourself a disservice if you go with the first dealer that offers you a Kia Forte lease. The best way to get a great deal on a lease is to shop around using multiple dealers. With the coronavirus pandemic, many dealerships have made it easier to access their online sales programs.
Using the internet, you can expand your search for great prices offered by dealers in your surrounding area - all without having to visit a physical car lot.
Not ready to lease yet? You have the option of taking over someone’s lease for the remainder of its term. Of course, this severely limits your options, but it’s a good alternative if you’re not ready to get a long-term lease. Websites such as LeaseTrader, SwamALease, and QuitALease are places to connect with people who want to abandon their lease.
Get a Curated List of the Best Used Cars Near You
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