You probably know by now how I feel about leasing; that is, don’t do it. It’s a scam designed to make car companies major moolah while getting you to pay a new car price for a used vehicle. However, I get that there are some instances in which leasing makes sense: for example, if you are temporarily relocating for work, or perhaps a student heading off to school in another state. You need wheels to get around without the long-term commitment that comes with ownership. So if you must lease, just do me a favor: be smart about it. Here’s how:
- Add it up. A lot of the car business is designed around making that monthly payment look good. What they don’t show you is the total cost you’re actually paying. Car salespeople usually quote you a price without sales tax or licenses, so factor that in before you sign so you know exactly what you’re signing up for.
- Be upfront about what’s “up front.” “No down payment” doesn’t mean no payment s due up front. Most leases make you pay fees for tag, title, acquisition, registration and dealer documents. Some leases also require a security deposit. Okay, so all that is not called a down payment per se, but it is normally due along with your first payment, so it might as well be one.
- Don’t fall into the term trap. One of the oldest tricks in the lease book is manipulating the term of the lease to make you think you are getting a deal. Let’s take an example of you thinking you’re doing good by getting a $277.77 thirty-six-month lease down to $250. The salesman might huff and puff and give you a “you’re getting away with murder this deal is so good” look and tell you he can do $250 payments but it has to be a forty-month lease. Welp, that’s the exact same deal—you’re just spreading it out a little more.
- Care about the price of the car. Just because you are leasing and not buying doesn’t mean you can ignore the sticker price of the car. The price is a big factor in determining the lease payments, so haggle for that, too. The lower the price is, the lower your lease payments will be.
- Beware of early termination hooey. Don’t get bamboozled into thinking a dealer will “take care of” getting you out of your old lease early. You technically can get out of a lease early, but you will pay A LOT to do so. Don’t ever let them convince you to “wrap” those costs into the new lease, because you will end up eating it; after all, you are financing over a longer period.
- Don’t comparison shop. Sometimes car salesmen will try and show you what an amazing deal leasing is by comparing your lease payments with your car payments if you bought the car. Well, yes, of course the lease payments are lower, because you don’t actually own the car in the end.