Thursday, March 20, 2014

Vehicle Lease for longer term?. Lower payment?? Look closely!

  We are all in search of the LOW payment when negotiating our lease. Something I hear day after day is... "I need the lowest payment possible!"  What we forget is that we should be shopping by purchase price and not by payment.
      What does that mean? When you purchase or lease a car, you want to make sure you get a good deal. This is based on the price you pay for the car. The monthly payment will fall into place. Once you negotiate the purchase price of the car minus your rebates, money down or trade,  then all you have left in the term and the interest rate/ money factor. THE PURCHASE PRICE DOES NOT CHANGE WHETHER YOU LEASE OR PURCHASE your vehicle.  You could be leaving money on the table.
           36-39 months is pretty standard in the leasing world for a vehicle lease agreement. Its really the most common. Its not forever and you are mostly covered by warranty depending on your miles that you are driving. Most manufactures push these terms and will offer the lowest payment, best money factor and a good residual. To go longer would be silly because the payment sometimes actually goes up. It does NOT make sense. A big down payment is not a solution!
       Some  Other manufacturers do offer longer terms like 42, 48 and 60 month leases. STOP and THINK before you jump on this because the payment is lower. If you have to stretch a lease out that long to afford it, you may be on the WRONG car! This car may be too expensive for your budget.  The other aspect of choosing a longer term can be the difference in cost of tires, brakes and other maintenance. Before you sign on the dotted line, look at the whole picture and revisit the cost of a purchase. The cost of more payments, interest, maintenance and repairs adds up. Sometimes we don't realize how that extra 6 months or year did not really save us anything if we have to spent 500.00 to 800.00 on a set of tires!!!! Maybe it opens you up to look at some different cars.

I call those problems "high class problems". The problem of which car to choose!!!!! We should all be so lucky.

              We all want a good deal. One that is fair to all parties involved. That includes the consumer and the dealer. At the end of the day, you need to make sure that you do what is in your best interest. Follow your gut, stick to your budget and take your time. We talk ourselves into things because we get so excited, but it is a contractual agreement so you need to take it seriously. 


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