Who doesn’t love the smell of a new car?
Leasing has been lauded as your cheapest ticket to keeping up with the hottest vehicles and trends in the industry. The jury, however, is still out on leasing: With the industry full of hype and skimpy on details, it’s hard to tell the difference between a really good deal and a downright superior sales exercise.
Don’t you just love the smell and feel of a new car? I also. That’s why, when it comes to car leases, I make sure I fully understand my options and whether I should lease or buy my cars. I’ve learned over the years that there are all kinds of hidden costs involved in leasing a new car. Are you aware that there are underground car dealers out there who will blindly rip you off if you let them?
You should check all your options and read the contract carefully. Did you know that your standard payment could have been randomly made by one of these dealers on the spot just by looking at you and deciding how much cash they should charge you?
Reiterate and question everything on the lease form and ask deeply why you should pay what you are paying. The fine print can be your friend, use it against the car dealer to arrange a better deal elsewhere.
Many people are swayed by the concept of a lease and its low payments. Yet these same customers are living the high life until the day comes when they finally have to return their car. When you buy a vehicle, you own it, or at least the bank owns the note until you pay it off. Before a consumer can lease a car through a dealership, many parties are involved in calculating the suggested lease vehicle’s residual value and interest rate. If the market is depressed at the end of a lease and the residual value is higher than the value of the used car, the loan source will have huge losses.
The lessee/consumer who leases the car begins by agreeing to pay the loan source a monthly payment for the term of the lease. Behind the scenes, the lender secretly decides a loan rate that he needs to return a profit to his backers or banks. A third-party company is typically employed to prepare the displays that are available to subscribing dealers across the country. Included in this information is the list of many potential banking sources. The new car dealer is just a facilitator between the renter and the loan source. They are not true to their manufacturer in this regard and can be a buyer’s best friend by showing many standard lease payments and interest rates from many lending sources.
When the lease ends, the money source pays the sale price; a portion is used to pay the cost of the distributor and the balance is the profit of the distributor.
As with all things in life, if you don’t understand what you’re doing, seek advice before signing on the dotted line.
Leave a Reply