When it comes to the subject of vehicle leasing, many people get confused over the terms and jargon that’s involved, and this can result in them paying more money than they ever imagined. It’s very important to have their own decision based on information they learn themselves.
Here is an overview of some tricks that dealers use to earn more profits. They have tricks that they go by to get the consumers to pay hundreds of more dollars than they should be paying.
Trick 1: “Leasing is always better than buying.”
Dealers like to make the customers think that they can get lower monthly payments for long term loans of five years or more. There are some catches with such lengthy contracts, though. Higher mileage, for instance is one catch. You will be given a limit to the amount of miles you can drive, and you’ll be paid .10 – .25 per extra mile. Another catch is for excessive wear and tear. Warranties usually only cover three years, so you’ll be left wide open those last two years to pay for wear and tear fees.
Trick 2: Cheap APR rate on the lease for 2-3%.
The dealer most likely won’t be quoting the lease’s interest rate, but the lease money factor instead. While the two are similar and both important in configuring your monthly payment, you can receive a more accurate rate by multiplying 24 to the money factor. For example, a 3% “cheap” money factor, 24 x .003 = 7.2%. You can get a better idea of the annual interest rate by doing this.
Trick 3: Early lease termination without any stress.
Dealers know that customers’ needs usually change and that they will desire to get out of the lease sometime before the lease’s end. Unfortunately, when you sign the lease form, you’re pretty much saddled with the payments every month for the remainder of the term, and it’s highly unlikely that you can get out early. If you choose to do so, you’ll find that you may have to pay hefty penalties.
You can avoid falling for the usual tricks by educating yourself about vehicle leasing. Study and research a lot so that you can understand the leasing terms that the dealers will use. You shouldn’t ever sigh anything until you understand every single term and number that is involved. Don’t allow the dealer to talk you into signing anything that you’re uncomfortable with. Only you can decide whether or not an agreement is a good choice for you.
16 Dec
