You have your eyes set on a race red Ford Focus Titanium sedan, a model loaded with such goodies as MyFordTouch, a Sony audio package, dual zone climate control and heated front leather seats. Buying this car is one option, but so is car leasing. You decide on the latter financing option, intending to keep this car for about three years. Read on and we will discuss how to make a lease deal happen.
1. Know your needs. One of the pitfalls of car leasing is that for some drivers it just never pays off. Those people include road warriors who easily put 20,000 miles or more on the odometer annually.
Car leasing typically caps mileage limits at 15,000 miles per year, thus those extra miles will cost you dearly, usually 20 cents per mile. That’s an extra $1,000 in payments per year for every 5,000 miles you travel above the limit.
If you drive at or below these limits then car leasing still makes sense. On the other end of spectrum, if you drive just a few thousand miles per year, you should negotiate for a low mileage lease. Your monthly lease payments will come in lower too.
2. Negotiate the price first. When looking for a car to lease, you should treat this transaction like you would any new car deal: you negotiate your best price first, then you talk about your financing options.
Many consumers fall for the published lease offer and miss out on a better deal. For instance, that Ford Focus Titanium model may be leasable for $209 per month with $1,899 down, but you usually can get a better deal as long as the sale price has been reduced through negotiation.
3. Your lease terms. Lease terms generally are for three years, but you have some options here. If you want different terms, be sure to ask for them.
New car leasing can be as short as one or two years and as long as four or five years. Keep in mind that the longer term leases may extend beyond your vehicles warranty, which means that you will be responsible for whatever maintenance needs to be made. Ideally, you will have the car long enough to break it in, but not too long where it begins to break your wallet.
4. Cost of leasing. Some of the obvious costs of car leasing are the down payment and the monthly payment. There are other expenses, however, including residual and acquisition fees, costs that can also be negotiated.
Car leasing can be a bit more complicated than standard car financing, therefore you should go into the deal with a good credit score. Read the lease contract carefully. Know what costs you will be responsible for. Make sure that your lease includes GAP or guaranteed asset protection, coverage that pays off your car if you suffer a total loss.
5. The lease contract. Once you are satisfied that the car leasing is right for you and after you have examined the contract and seen your requested changes included then sign it
You can get a car lease through the financing arm of your car manufacturer. You can also get a car lease through your bank, a credit union or through an independent leasing company. You do not have to lease with the company your dealer suggests, therefore shop around for a lease arrangement that is right for you.
Car Leasing Notes
Car leasing typically means lower monthly payments than car financing. That means you can usually upgrade to the next model or choose a higher end brand than one you might have previously considered. Keep in mind that at lease end you will return your vehicle. Optionally, you may exercise the option to buy the car.