If you’ve done all of your homework and finally found the right car to suit your needs, it’s time to sit down and talk about financing. For many people, leasing is a way to get the car they want at a price they can afford. If you’re considering leasing a car, there are a few questions you should ask to make sure you understand what’s going on, and end up with the best deal possible.
#1 Can I get a lower price?
This is code for, “Are there any lease specials happening?” Some auto manufacturers offer lease specials at various times throughout the year. The specials may be on models that aren’t performing well that year or simply to encourage sales. Beware that the quoted monthly lease payment on a flyer for a special may not include all of the fees and other expenses that will drive up the monthly payments.
#2 What will the car be worth later?
Higher residual values mean better deals. The residual value is what the car will be worth at the end of the lease. When you lease a car, you make payments based on how much the vehicle will depreciate while in your possession. Cars that hold their value better are cheaper to lease.
#3 What is the interest rate?
The interest rate is called the “money factor” in a lease. It’s completely negotiable, though most people leasing a vehicle don’t know that. Take advantage of this and get yourself a better rate for lower payments.
#4 How many miles are included in my lease?
If the lease seems too good to be true, it probably is. Often, dealers advertise a lower lease rate by limiting the number of kilometers included. If you’re looking at a lease that only accounts for 10,000 kilometers each year, but you know you drive 12,000 kilometers a year, you’ll be looking at some heavy fines when the time comes to return the vehicle.
#5 Are there any other fees I should know about?
Leases are ripe with hidden fees. Dealers don’t include the fees in promotional lease rates. That means you won’t be paying the price you saw on TV or heard on the radio. Ask about other fees and how those will affect your total price. You can reduce your payments by putting money down towards the fees. Remember, some fees are even negotiable and can be removed altogether for an even better deal. Ask if the dealer can remove or reduce some fees and you may be surprised to see what you can get.
#6 Is the lease transferable?
If you want flexibility, you’ll need to make sure your lease is transferable. This will let you change cars before the end of the lease, or transfer your lease if you fall into sudden financial difficulties.
Once you get the answers to these questions, you’ll have a pretty good understanding of your lease and what kind of a deal you are getting. If you don’t like the deal, you can always visit another dealership and keep shopping around. Sometimes the threat of losing business is just what a dealership needs to make a deal.