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Sunday, March 30, 2014

Seven Secrets To Getting The Best Auto Leasing Deal

1. Watch Out For Advertised Specials-Advertised specials are not as appealing as they seem. Sometimes car makers keep the monthly lease payments low by allowing 10,000 miles instead of 12,000 miles. They also may require steep down payments which are more than lessees normally pay.

2. Select A High Residual Auto - The size of your lease payments will be based on how close your vehicle's residual value or worth when you turn it in at lease end. Acura, Toyota, Honda, BMW, Lexus,  and Mercedes  hold their value quite well. American brands don't do as well.

3. E-mail Or Call Three To Five Dealerships - Contact the Internet department and explain that you are "shopping for a lease payment" on your vehicle. This lets dealers know that you are contacting competitors and will improve your odds of getting a competitive price. Also, keep in mind that "advertised lease deals" are negotiable! Tell each dealer that you won't visit their lot until you have received a written quote and have agreed to terms. The only exception is to visit a lot for a test drive. But whatever you do, DO NOT enter into the salesperson's office.  Remember, arriving on a lot without a deal in hand reduces your leverage.

4. Get A Work Sheet - Ask the dealer with the lowest monthly payment to email you a "work sheet".
This sheet puts the details  of the lease offer on paper. Some dealers will balk about emailing you a work sheet, but tell them that they will eliminated from your list if they fail to comply.

5. Get The True Market Value & Dealer Invoice - Go to www.Edmunds.Com  to get this info. Note that the true market value may be below the dealer invoice price if there is a factory rebate on the car. If the capitalized cost listed on the work sheet is higher than the true market value, then subtract the dealer invoice price from the capitalized cost. Then email the dealer and say, " I noticed that this lease is based on a capitalized cost of ( X  number of dollars ) above ( or below ) the dealer invoice price.My research indicates that this car is currently selling at ( X number of above or below ) the invoice price."To get this figure subtract the dealer invoice price from the true market value to get this figure. In most cases, these numbers will be quite close. Then say, I'm looking for a dealer that will lease to me at that figure." Try this first with the dealer that gave you the lowest monthly payment.Then try the others if the first dealer won't give you a capitalized cost close to true market value.

6. Check The Money Factor - This is also called a "lease factor", "lease rate" or just "factor". It is the lease equivalent of the interest rate on a car loan. But it is presented in a confusing way to make it difficult for lessees to tell if their getting a good rate. To convert the money factor  to an interest rate, multiply it by 2,400. For example, A .00125 money factor x 2,400 = and interest rate of 3%. If the figure is higher than the going rate on a car loan, you might be paying too much. This is usually something that a dealer can't negotiate since it is st by the bank or leasing company. However, a high money factor may indicate that the leasing company considers you to be a high credit risk. If that doesn't seem right to you, obtain copies of your credit reports from www.AnnualCreditReport.Com  and get your FICO score too. You get get it free on a monthly basis if you have a Discover IT card. If  you have a current Discover card, Discover will change it over to an IT card for free. Go to www.Discover.Com for more details. 

7.  How To Handle Your Trade-In  Go to www.Edmunds.Com   again and get the value of your used car. Look for the drop down menu that reads, "trade-in value and pricing".You'll get three numbers. The trade-in or wholesale value, the private party sale value and the dealer retail. Try to get the dealer to give you  a trade-in value as close as you can get between private party sale and dealer retail. If not, try to locate a www.CarMax.Com   used car dealership to sell your car. If there's not one near you, sell it yourself on www.Craigslist.Com            

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