When I sold cars, we had very in-depth sales training. One facet of the car sales business we were well educated about was leasing a car as opposed to outright buying a car. This article is to help pass on what I learned from my car sales training about whether you should buy a car or lease a car. This topic is probably one of the most misunderstood by the general public. There are a lot of misconceptions and inaccuracies about leasing a car as opposed to buying a car. Hopefully, this article will help to clear some of these issues up.
When it comes to leasing a car, it can be quite confusing for the average consumer. It doesn’t matter what your reasoning is for wanting to lease a car, the most important thing is you get the best value for your money. In this article, I will help you do that.
If you’re in the market for a new vehicle and know that you want to lease that vehicle; pay attention to commercials on television and newspaper advertising. What you’re looking for is what is called factory subsidized lease deals. The reason the car dealers run these promotions is because they realize that you are more likely to be repeat customer, if you lease a car, rather than buy one outright. When they are running these promotions they work with the leasing company and adjust the residual value of the vehicle and offer low financing charges. You should also be aware of the term subvention. When a particular model of car is not selling as well as it should be selling, auto manufacturers will use a subvention. A subvention is a subsidy on the cost of the car, which will save you money
The better educated you are about the car you want to lease; the better off you’ll be when it comes to negotiating. Before you even go to a dealership, think about what kind of car or model and trim level that you want to lease. Once you have a good idea about what type of car and all options you want to lease, you need to be able to calculate your own lease payment before you go to the dealership. You should search online and find a leasing tool kit or free lease calculator. These tools will give you a good idea about what you should be paying for your leased car. You should also try to get different quotes from different leasing companies
Do not forget to research all fees, which will be part of your payments for your leased vehicle. You may be responsible for such things as license fees, registration, title fees, and acquisition fees. You may also be responsible for Freight fees, and of course, local and state taxes. When your leasing period is over, you may be responsible for what’s called a disposition fee. The disposition fee is what they will charge you when you go over your mileage limits and for any excess wear and tear on the vehicle. Most important to remember, is that the automobile industry is all about negotiation and that goes for the acquisition and disposition fees. Most of the time, you’ll be able to negotiate these fees.
Most leasing companies will allow you to drive your vehicle 15,000 miles per year with no penalties. However, once you go over your 15,000 miles they will usually charge you $.10 to $.20 per mile. If you have a long commute, or like to take long trips when you go on vacation, and rack up 35,000 miles a year on your car. Penalty fees can wind up costing you thousands of dollars at the end of your leasing period. If this describes you, and you still want to lease a car, it may be possible to avoid all of those excess fees. Try to negotiate a higher mileage rate per year, and also try to negotiate a smaller penalty per mile fee. Remember, when it comes to the mileage fees, it is better to over-estimate how much you will be driving your vehicle than to underestimate and wind up paying thousands of dollars that you could have negotiated smaller rates for.
One of the best pieces of advice that I can give you, is to make sure you have GAP coverage. This coverage will protect you in the event you wreck your vehicle; your vehicle gets stolen, or totaled. Unfortunately, if you do not have GAP insurance, you may owe the leasing company thousands of dollars or more. You don’t want to have to pay for the same thing twice, so make sure that the GAP coverage is not included, before you get GAP coverage.
