Should You Get an Auto Lease?

While the concept of an auto lease is simple, many consumers don’t fully understand how the process works and aren’t sure if it is the right decision to make. Many feel that the auto lease is simple a rent-to-own scheme, but the auto lease is actually a common financial concept that the commercial world has used for a long time even though it is still new to automotive customers. The biggest misconception is that an auto lease is the same as renting. The following auto lease guide will help you to see the advantages and disadvantages to an auto lease while showing you how to get the best auto lease deals.

The Advantages

Before you completely dismiss the idea of an auto lease you should at least consider the benefits they offer. Once you know the benefits of a new and used auto lease you may be more inclined to choose this option for yourself the next time you need a car. First, leasing a car can save you money with lower monthly payments since you only pay for depreciation during the term. This means you average monthly payment for an auto lease is thirty to sixty percent lower than a typical car loan.

The auto lease is also an excellent way to help you establish your credit. If you have either bad credit or if you are a first time buyer then you may only be able to get financing through a dealer if you are leasing. Then once you have established your credit you can get financing to purchase a car. Because of the lower payments involved in an auto lease you can often drive a new car every three years so you won’t have to pay for costly mechanical repairs.

An auto lease requires very little to no cash down payment. While some dealers can require between two to seven thousand dollars for a down payment you can easily walk away from any deal you don’t like and look into another dealer with a better auto lease option. By choosing a closed end auto lease you won’t have any difficult time at the end of your lease. You just turn in your car pay the disposition fee and you’re done.

The Disadvantages

However, as with larger purchases you will make there are always some disadvantages to consider. Once you carefully consider the advantages versus the disadvantages you can make an informed decision regarding whether or not the auto lease is right for you and your car needs.

First, with an auto lease the selling price is often MSRP. Some dealers will haggle or rush you to sign in order to hide this value; they will try to focus all your attention on the lower monthly payments. So carefully consider the MSRP and if you don’t like the deal simply look for another. An auto lease does require a dealer acquisition fee of between five hundred and seven hundred dollars. Plus at the end of the auto lease you will need to pay disposition fees that can often be around four hundred dollars. Be aware of the auto lease dealer that tries to confuse you and lie about the money factor, some won’t even mention it to you.

If you want to trade in, dealers are not required to itemize trade-ins so you may not get credit for them. You may also be required to purchase the minimum insurance policy of around three hundred thousand in order to lease a vehicle. So dealers will try to avoid giving you a rebate, so make sure any rebate you are eligible for is included in the deal.

While leasing can be a good option at first, you should also be careful. Constantly doing back to back leases can be more costly than buying with all the fees you pay. So consider you options carefully before deciding either way. Read your terms and small print carefully so you are completely aware of what auto lease deal you are getting into.

Finding the Best Deal

If you want to get a cheap auto lease then there are several areas you need to look. The best source of a good auto lease deal is through newspapers, radio and television ads. Any local advertisement you notice for an auto lease deal should be considered since you probably won’t find a better deal at another time or place.

You can also get a discounted price by looking for auto lease online through a referral or pricing service. InvoiceDealers, Edmunds and CarsDirect are a few of the major online services that offer auto leasing deals. When going with the online option it is best to use an auto lease calculator in order to compare quotes from multiple companies. This way you can be sure you are getting the best auto lease deals for your money.