Affordable Car Lease
If you are looking for an affordable car lease you need to take your time and avoid making a snap decision. It is best to be reasonable and consider a budget which should be calculated several years into the future. A car leasing inquires more insurance requirements and stringent maintenance and the company expects that at the end of the contract, the car will have a minimal wear and tear. Don’t forget that if you decide to cancel the leasing, you will be obligated to pay penalty fees.
In order to find a cheap car lease you need to look not only at various dealers, but also at different sales-persons. Try finding those people that will not avoid answering your questions or try to confuse you or worst, be condescending towards you. This is a business transaction so you will definitely want someone that you feel comfortable dealing with and have confidence in him.
You need to learn more about the true market value or the bottom line price of the car. You need to know that this isn’t the MSRP – manufacturer suggested retail price, it is closer to the dealer’s wholesale price tag. To find this, check the car you are looking for at Edmunds or The Consumer Reports.
To spend as little money as possible on a car lease you need to work out the details in advance so that you will know exactly what you want from such a contract and avoid getting scammed by paying extra. Get acquainted with the terminology used in these lease contracts so that you will be able to fully understand what it implies. To be more concrete, learn more about the capitalized cost = price for car, residual value (value of the car once the lease ends), money factor (interest formula).
Think about the desired length of the lease contract. It is advisable that the length of the lease should match the period of the warranty. Beyond the life of warranty and the coverage, you will be fully responsible for any repairs. It is advisable to not extend the car’s warranty if you plan to lease the vehicle for the duration of the automaker’s warranty, no point in spending extra money for nothing although you might want to get Gap insurance for accidents and car thefts. The longer the period of the lease, the more you will have to pay in taxes and interest. All of the information regarding the interest, taxes and various fees can be obtained in advance if you visit a dealership or an agency. Once you are aware of these figures you can make relevant estimates of your monthly payments in advance by using the online payment calculators.
Another proven way of obtaining an affordable car lease would be to negotiate your contract. If you don’t have any negotiation skills, get a relative or a friend to do it for you. The monthly payments you will have to pay for the vehicle are determined by the capitalized cost plus the taxes, interest, dealer fees as well as closing fees minus the residual value. The latter is subtracted from the capitalized cost and you get the depreciation. For this you will be obliged to pay the monthly payments over the entire period of the contract.
Most of the experts in this domain recommend people that they should negotiate from the “true market value” or “bottom line price” and not down from the manufacturer suggested retail price in order to lower the capitalized cost. If you don’t want or cannot afford a down payment, you have the possibility to include it into your monthly payments. The dealers will benefit the most from this as you will have to pay interest on these fees which means that the payments will be higher in value through the entire contract.
Although it might come as a surprise for most of you, monthly payments can be a little bit deceiving. Even large amounts of money can be divided into small and comfortable monthly payments. If the monthly payment goes down, you should very well expect that the period of the contract goes up and so will the number of payments. Although you might end up spending less money per month, you will most likely pay more in total costs so be very careful. In fact, the monthly payments do not really care, what you should be very attentive at is the capitalized cost of the vehicle minus the residual value, plus the extra fees, tax and interest.
Another way of getting an affordable car lease is by taking advantage of the incentives and promotions available from time to time. For this reason, visit the manufacturer’s website or the dealer to find out if you can save a few dollars. These promotions are most likely to appear around the tax time, holidays and yearly close-outs. Do not forget to compare the financing options you have, especially if you happen to live in an urban area. Where there are many dealers, it means that there is more competition which is translated into more affordable options for the customers. Credit unions as well as various bank offer pretty competitive packages for car leasing contracts. Also available for several years are the independent vehicles leasing firms which rely only on leasing cars to the large audience without being a regular auto dealership.
Last but not least, make sure that you check all of your options as the popularity of these contracts has grown very much in the last few years, meaning that you now have more options than ever before to get a good deal on a car lease.
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