Car leasing is similar to a car rental — but for a longer period and with extra fees. There are many who prefer leasing to buying since it permits them to drive a new car for less money than buying it outright.
Once a car has been found and a good deal negotiated, online services like LeaseFetcher can point you to special lease offers, making the entire procedure faster and stress-free.
The common suggestion is leasing for no more than three years. That keeps the car under bumper-to-bumper warranty protection. Some people extend their leases to reduce the monthly payment, but that means more money is invested in a car which will never be yours.
Most contracts come with about 20,000 kilometres a year. Someone driving over 55,000 kilometres in three years could face a charge for each kilometre over. Additional mileage can be bought up front and the cost rolled into the monthly fee.
“Drive-off fees” are up-front payments called for in some contracts. Advertised leases often list high drive-off amounts, but try to stick to the minimum to get the lease started.
Talk to your insurance agency for a quote. Lease companies often want higher levels of coverage for leased cars as compared to purchased vehicles. The lease company’s liability is greater and they pass the added expense on to you.
Estimate a potential lease payment before visiting the dealership. Get a good idea of what is really a “good deal.” Estimating the payment is complicated, but it is possible to figure out what it should be — with some patience. To calculate the payment, get the residual amount for the car and call the finance manager at a local dealership. Ask for the 3-year value of the car you’re looking at. Add this figure into the formula along with mileage costs, down payments and trade-ins. The resulting monthly payment may not be exact, but it will get you in the ballpark.
Many automakers offer, occasionally, greater discounts on leases. The specials may have more costs hidden in the fine print, so check to learn if the stated monthly cost considers sales tax or high drive-off fees.
If a lease isn’t available for the car you want, locate others online and look at the link listing the number of cars available. If you find a car that grabs your interest, contact the dealer to check on availability. In areas where multiple dealers offer the same car, you are in a better negotiating position.
Be sure to test drive the car salesperson as well as the vehicle. Do you feel comfortable with them? Do they return your phone calls? Are your questions answered in a straightforward manner?
Now that you have vetted the salesperson, found your car and have some quotes, work to improve the deal and look for the lowest offer. Contact other dealers and see if they can beat the quoted price. If no one responds favourably, you have found the rock-bottom price.
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