One way you can be sure you know what you're getting into is to get the very inexpensive Expert Lease Pro Software! It's the most powerful consumer car leasing software available!
Expert Lease Pro is powerful, easy to use software to help you lease or buy your next vehicle. In addition to helping you make the right lease/buy decision, this amazing product can save you thousands by helping you spot hidden fees or other funny business with the numbers.
Believe me, you can't be too careful when it comes to checking the numbers in a car lease contract! Especially if the contract was prepared by a car dealer!
This software comes bundled with invoice and retail prices for all new vehicles, Automotive Lease Guide Residuals, and the Car Deals Rebate Incentive report.
This software allows you to analyze a car lease deal from every angle, and it will keep you from being taken advantage of by an unscrupulous car dealer.
In its simplest terms, car leasing is just an alternative way to finance a car, truck or an SUV.
When you lease a car, the only money that is required up front is your first payment, a security deposit, which is usually equal to your monthly payment, and license fees. In most states you pay sales tax on each individual payment as you go along.
The difference between car leasing and conventional financing is this: With leasing, your payments are based only on the portion of the vehicle's life that you actually use, or the depreciation. Add to that the money factor, which is essentially the same as the interest rate, add taxes and you have the makings of a car lease payment.
The depreciation is determined in part by the term of the lease, the number of miles you drive and the condition of the vehicle at the end of the lease.
With a conventional loan your payments are based on the full value of the vehicle.
Generally speaking, you can drive a more expensive vehicle -- with a lower payment if you lease. Of course, you have to give the vehicle back at the end of the car lease term, but at that point if you want to keep it you can purchase it and finance the balance.
Car leasing isn't for everyone. Be sure you understand all the aspects of leasing a car before you take the plunge!
Car Leasing Mileage Facts!
With car leasing, you are limited to a certain number of miles over the term of the lease. Usually 12,000 to 15,000 miles per year. Actually, it doesn't matter how many miles you drive in a given year as long as you don't exceed the total allotted miles for the term of the lease.
For example, a 36 month car lease at 12,000 miles a year gives you 36,000 miles over the term of the lease to play with. If the mileage on the vehicle is over 36,000 miles when you turn it back in at the end of the lease, you will be penalized so many cents per mile depending on your lease company. Usually it's anywhere from .12 to .15 cents a mile extra!
You can also request a higher mileage lease. For example, instead of 12,000 or 15,000 a year you can get 18,000 or 20,000 or more per year, but you will still pay for the excess miles! It's just spread out over the term of the auto lease in the payments.
So, the bottom line here is, if you drive a lot of miles, car leasing probably is NOT a good idea for you!
Your Credit and Car Leasing!
In order to lease a car, your credit rating must be as good or better than it needs to be if you were getting a bank loan. If you're not sure how your credit looks, or if you just want to make sure their is no incorrect information in your credit record go here to get a copy of your Free Credit Report & Credit Score.
Once you lease a car, you are pretty much locked in, but not entirely! One of the ways you can get out of it is by refinancing it into a conventional loan. This can be tricky, so take care!
Here is one lending institution that specializes in refinancing leases: AutoLoanSoup
Another way you can get out of a car lease is to visit SwapaLease.com Not only will they assist you in getting out of a lease, but they can help you take over someone else's car lease! There service is definitely worth taking a look at!
Ownership of the Leased Car!
When you lease a car you don't actually own it! You drive it and maintain it just like you own it, but the vehicle is actually titled and registered to the bank or leasing company that you are leasing from.
At the end of the car lease you have to give the vehicle back! You will also be penalized for any "excessive" wear and tear when you turn it in. Also, some lease contracts have a turn in fee. Be careful of these.
On a closed end lease, the Only kind you should get involved with, you have the option of purchasing the vehicle at the end of the car lease, or you can lease another new vehicle or do neither, and simply turn it in and walk away.
Your Trade-in!
If you have a trade-in you must be Extra Careful. Be sure that whatever trade-in allowance you agreed to accept is deducted from the Capitalized Cost. Some lease contracts don't break out the trade amount, and some unscrupulous car dealers have been known to steal trades!
If you owe money on your trade it has to be added back in, so watch the figures very carefully. To save yourself a lot of money , and to keep from getting ripped-off you should consider getting the software package called Expert Lease Pro!
Your Sales Tax!
When you are quoted a car lease payment make sure the payment includes sales tax. On a lease, you are taxed on each payment, and dealers are notorious for quoting payments without tax.
Car Insurance!
Most Var Lease Companies are very specific about the insurance coverage you must provide on your leased vehicle. The requirements are often different from what is needed for more conventionally financed vehicles. To be sure you are getting the proper coverage get a Free Price Quote from the experts at: Allstate, GEICO.Com and 21st.com
then compare coverages and prices.
Car Warranties!
Most new car warranties are for 36 month or 36,000 miles whichever comes first. It makes little sense to lease a car beyond the factory warranty period. Yes, you can buy an extended warranty, but do you really want to make that kind of an investment in a vehicle you have to give back?
The only time you should consider an Extended Warranty on a leased car is if you are planning to buy out the car lease, or if you are planning to buy the vehicle at the end of the lease term. One lending institution that specializes in these types of buyouts is AutoLoanSoup
For all the details on extended warranties go to Extended Auto Warranty Tips!
Understanding Car Lease Terms!
There are three main terms in car leasing that are confusing:
Capitalized Cost. The capitalized Cost is simply the selling price of the vehicle. Now, wait a minute! It's not That simple! Almost, but not quite!
You've got your Gross Capitalized Cost which is the selling price of the vehicle (Which you negotiated just like you were buying...OK?!), plus all other pertinent fees like the Acquisition Fee if any, dealer title fees, payoff on your trade, Extended Warranty, Credit Life Insurance, Accident and Health Insurance, Gap Insurance and any other fees that might come into play.
Then there is the Adjusted Capitalized Cost which is the Gross Capitalized Cost minus any reductions such as net trade-in allowance, cash down, rebates, taxes, license fees and registration fees. Are you getting all of this?
Residual Value. The Residual Value represents the estimated value of the car you're leasing at the end of the lease term. These values are published monthly in the form of a percentage or a dollar amount, most commonly in the American Lease Guide (ALG). The higher the Residual Value the lower your payments! Some vehicles hold their value better than others, so when you're choosing a vehicle check this out carefully.
The Money Factor. Essentially, the Money Factor is the same as the Interest Rate on a loan.
The best way to make sure you know what's going on with all the figures on a car lease is to get yourself a copy of Expert Lease Pro Software. Unless of course, you would rather just leave it in the trusting hands of the car dealer!
Car Leasing and GAP Insurance!
Gap insurance covers the difference between the value of your car and what you owe on it in case the car is declared a "total loss" by your insurance company due to a wreck, it being stolen or some other catastrophe such as fire, flood or storm damage.
"Even though gap insurance is important for people who buy, it is essential for those who lease a car," says Mary S. Butler, senior editor of cars.com. "Gap insurance basically originated with car leasing."
The upside-down nature of a typical lease is even more common than a purchase situation because the lessee usually has no trade-in and usually puts little or nothing down. Similar to a purchase, if the car is a total loss, you owe the difference between what you have paid and what you owe on the balance of the car lease.
The Bottom Line Here, is that if you are the kind of person who buys a vehicle and finances it for 5 or more years, and gets bored and are looking to trade after 2 or 3 years, then car leasing for 2 or 3 years is probably good for you. Providing of course, that you don't put a lot of miles on your vehicles.
If you are going to have an on-going car payment anyway, you might as well lease. This way you can have a new vehicle every 2 or 3 years. It will always be in warranty, and when you turn it in you won't owe more on it then what it's worth like you would if you financed it. Plus, you'll be able to drive more vehicle for less money then you would if you financed it.
One Word of Caution:
What ever you do, stay away from 4 or 5 year car leases. They make no sense at all. Dealers try to push 5 year leases because the payment is slightly lower. It looks good in their ads! Now they're pushing 72 month leases or 6 years! Where's the sense in that? Do yourself a favor and lease a car for 2 or 3 years only. If you want to keep the vehicle you can always buy it when the lease is up.
If you're the kind of person who buys a vehicle and keeps it 8 or 10 years to get your money's worth, then just go with conventional financing and you'll do just fine. One excellent financial source you should get a finance quote from is AutoLoanSoup
One more thing! Don't forget to negotiate a car lease just the same way you would as if you were buying. Settle on a sales price before you even tell them you're leasing a car! Get yourself an inexpensive copy of Expert Lease Pro Software and you'll have the dealer cost on all car models. This will enable you to negotiate a car lease deal from a position of power. You'll be in control...not the car dealer!
