Important Factors to Consider When Weighing Car Leasing Deals

Car leases are fairly simple, yet many automotive consumers don’t completely understand them and are often skeptical, even afraid of them.

Car leasing deals are frequently misunderstood as a kind of “rent-to-own” scheme hatched up by clever dealers to separate good people from their money.

There are even well-meaning but misinformed “experts” who are quick to advise against getting a car lease because they consider it a scam or they say it is the same as renting instead of buying a house, i.e., “you are throwing your money away.”

In fact, leasing is a well-respected and common financial concept that has been used in the commercial world for decades as a method of financing buildings, equipment, and vehicles — although it is still relatively new to most automotive consumers.

As with any business transaction, the key to successful and intelligent car leasing is understanding how the process works, taking the time to properly prepare yourself before making decisions, and learning to use car leasing to your benefit rather than to your disadvantage.

Without at least a basic understanding of car lease concepts, such as knowing how to get a good deal, and knowing how payments are figured; you’ll expose yourself to the very real possibility of making mistakes, significantly overpaying, or worse, being cheated.

When considering car leasing deals, here are four important factors you should always consider:

• Total initial payment, including drive off payment and any applicable extra fees

• The amount of each monthly payment

• The total number of months that the lease runs

• Any additional charges that will be assessed at the end of the lease

Also, what many people do not realize is that just as it is often worth your while to shop for the best deal when you’re buying a car, it is also wise to look around for the best deal when you want to lease a car.

You see, to get your business one dealer might be willing to negotiate certain fees or another might be willing to lease a car at a lower cap-cost.

When leasing, you should also be sure to compare the costs for identical vehicles at different dealerships.

A car lease with a lower drive-off payment and higher monthly payments might cost more overall than one with a higher drive-off payment and lower monthly payments.

In any event, leasing is a way to use an expensive vehicle for less than what it would cost to buy it, not to mention a way to avoid getting stuck with a vehicle’s depreciating value.

Here are some additional benefits you could receive by leasing:

• Lower payments – your monthly payment could be as much as 30% to 60% lower than for a purchase loan because with a car lease you’ll only be paying for the portion of the car or truck that you actually use.

• Fewer maintenance problems – 1. You’ll be leasing a new automobile that is less likely to break down and 2. Most car leases coincide with the length of the manufacturer’s warranty so should any issues arise the repairs will be covered.

• Lower taxes – in most states you don’t pay sales tax on the entire value of a leased vehicle as you would if you bought the vehicle outright.

• Little or no down payment – most leases require little or no down payment which makes getting a new car more affordable.