To keep with the industry's hottest vehicles and trends, leasing has been lauded as your cheapest ticket. But still out on leasing is the jury it's difficult to distinguish a good deal and an up-selling exercise with the industry long on hype and short on detail.
Spotting a good deal
Finding out if there are any down payments on the lease is your first step. A down payment refers to the lump sum amount that you pay upfront, either in cash, non-cash credit or trading allowance, to reduce your monthly payment. Before putting money down on a lease, think twice because you're forfeiting the general rule of leasing and getting a rough deal and not putting cash upfront means the money is not recoupable at the end of your lease. There is another big disadvantage: in the event of your car getting damaged or stolen, you insurance and the gap cost will not cover the loss.
Learn more about mileage limit
Over the length of a 3-year lease, most leasing companies allow you a limit of 45,000 miles. At first, it seems like a good deal but considering it only comes to 15,000 miles over a 12 month period, staying within this limit may be difficult. Those working at home may even find it easy to put 15,000 miles on their cars. If you exceed the mileage limit, the penalty for each excess mile can be as high as 20 cents. If you have an additional 4,000 miles a year over a length of a 3-year contract, this can quickly add up and you'll have to pay an extra $2,400 in excess mileage charges. When it comes to your mileage needs, you need to be realistic before you sign the contract especially if you regularly commute over long-distances. It's less expensive to contract for the extra before you sign than paying the extra charges at the end of your lease so you need to pad the miles that you expect to use.
What is sales tax?
Usually, the sales tax is capitalized and added to monthly payments. But to drive the advertised lease payments even lower, some dealers doesn't include it in their calculations. What they do instead is state in the small print that the monthly payment excludes "sales tax". The fine print should be carefully read in order to see any hidden costs not included in the advertised monthly payment. Slipping through the cracks are unscrupulous fees like registration, sales tax, and title fees.
Spotting a good deal
Finding out if there are any down payments on the lease is your first step. A down payment refers to the lump sum amount that you pay upfront, either in cash, non-cash credit or trading allowance, to reduce your monthly payment. Before putting money down on a lease, think twice because you're forfeiting the general rule of leasing and getting a rough deal and not putting cash upfront means the money is not recoupable at the end of your lease. There is another big disadvantage: in the event of your car getting damaged or stolen, you insurance and the gap cost will not cover the loss.
Learn more about mileage limit
Over the length of a 3-year lease, most leasing companies allow you a limit of 45,000 miles. At first, it seems like a good deal but considering it only comes to 15,000 miles over a 12 month period, staying within this limit may be difficult. Those working at home may even find it easy to put 15,000 miles on their cars. If you exceed the mileage limit, the penalty for each excess mile can be as high as 20 cents. If you have an additional 4,000 miles a year over a length of a 3-year contract, this can quickly add up and you'll have to pay an extra $2,400 in excess mileage charges. When it comes to your mileage needs, you need to be realistic before you sign the contract especially if you regularly commute over long-distances. It's less expensive to contract for the extra before you sign than paying the extra charges at the end of your lease so you need to pad the miles that you expect to use.
What is sales tax?
Usually, the sales tax is capitalized and added to monthly payments. But to drive the advertised lease payments even lower, some dealers doesn't include it in their calculations. What they do instead is state in the small print that the monthly payment excludes "sales tax". The fine print should be carefully read in order to see any hidden costs not included in the advertised monthly payment. Slipping through the cracks are unscrupulous fees like registration, sales tax, and title fees.