Would you like to stop worrying about expensive car repair bills as well as avoid the hassle of eventually having to sell a used car?
Many Americans are discovering the benefits of leasing a vehicle rather than buying one. But unfortunately, some of them didn't know how to properly negotiate a car lease, so they got themselves into financial trouble.
Here are seven basic car leasing tips, along with some considerations and warnings.
1. Determine What You Can Spend
The first step is setting a budget. It's important to realize that a car lease involves more than just a vehicle's price.
Other components include a down payment, "cap cost" (total car cost), mileage limit and buyout price, which is what you have to pay at the end of your lease if you want to buy the car.
2. Do Research and Know What You Want
Know which vehicle makes and models best fit your needs before even stepping into a car lot. Think about which options that are essential, in addition to the ones you can live without. In other words, don't give a salesperson the impression that you're not on top of things.
You don't want them to sweet talk you into something you don't want or need.
3. Learn Basic Car Leasing Jargon
Over hearing car lease professionals talk can be like hearing a foreign language. If you're unfamiliar with the vocabulary of car leasing, you can easily wind up with a bad deal.
Since leasing terminology isn't the same as what's used in buying a vehicle or getting an auto loan, it's critical that you learn the basic car leasing jargon so that you can get the best deal possible.
4. Know What's Negotiable and What Isn't Negotiable
Only focus on what it is negotiable, instead of wasting time trying to change what is not negotiable. For example, you can negotiate on things, such as interest rate, so do everything possible to get the best rate.
Other negotiable items include capitalized cost, buyout price, trade-in value, mileage cap and charges and cap cost reduction.
On the other hand, there are other factors that are not negotiable. These include those, such as residual value, acquisition fee, deposition fee, purchase option fees and registration and taxes.
5. Only Look at Vehicles That Are in Stock
You may have your heart set of a specific type of car, but if it's not in stock, most likely you won't get the best deal. That's why you should only buy a vehicle that a dealership has in stock.
Because special orders usually involve less incentive when making a deal, you'll probably be paying a capitalized cost that's not much lower than the car's sticker price.
6. Check the Car Manufacturer's Sticker
Although most people look at car window stickers to find out information, such as a vehicle's miles per gallon and price, they usually don't pay attention to the manufacturer's sticker, which is typically located on the driver's side of a car.
There on the sticker's upper left-hand corner, you'll find the date showing when the vehicle rolled off the production line. Consider that the longer a car has been on a lot, the more money a dealer must pay for carrying costs. This means they're more motivated to get rid of the car.
7. Bring Someone Along with You
It's always a good idea to bring along a friend, co-worker or family member who can help you stay on track, even if you have good negotiating skills.
Think about how a third party can spot drawbacks in a deal, besides remind of your budget.
Other Considerations and Warnings
- Closely examine a lease's mileage allowance, which is usually about 12,000 to 15,000 miles per year. If you think you'll be driving more than this, then negotiate for extra mileage.
- Don't try to negotiate a car lease when you're feeling sick, tired, hungry or just not your normal self. It's more likely you'll want to rush through the deal. Instead, only visit a dealership on a good day.
- Before visiting a dealership, call the dealership's internet sales department for a quote. Having a quote from a salesperson's own dealership can make it more challenging for them to lowball you.
- If you're not making any progress with a salesperson, just leave. This may lead to him or her running after you in a last attempt to "sweeten the pot".
To learn more about car leasing and our wide range of fleet solutions, contact us. Wilmar, Inc. is the largest independent leasing and fleet management company in the Southeast and has a reputation for delivering top-quality service.