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How To Spot A Good Car Lease

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Leasing has been lauded as your cheapest ticket to keep up with the industry's hottest vehicles and trends.

The jury, however, is still out on leasing: with the industry long on hype and short on detail, it is difficult to distinguish between a genuinely good deal and a downright up-selling exercise.

So how do you spot a good deal?

First, you need to find out if there are any down payments on the lease. 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. You should think twice before putting money down on a lease: not only are you getting a rough deal, as you're essentially forfeiting the general rule of leasing: not putting any cash upfront, but the money is not recoup-able 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.

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Mileage Limit

Most leasing companies allow you a limit of 45,000 free miles over the length of a 3-year lease.

This may seem like a good deal at first sight, but when you consider it only comes to 15,000 miles over a 12 month period it's not difficult to foresee why it might be difficult to stay within this limit. Even people working from home have little trouble putting 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. This can add up quickly over the length of your lease:

An additional 4,000 miles a year over the length of a 3-years lease contract, will end up costing you an extra $2,400 in excess mileage charges! Be realistic about your mileage needs, especially if you have to regularly commute over long-distances, before you sign the contract. Consider padding the miles that you expect to use since it is less expensive to contract for the extra before you sign, than it is to pay the extra charges at end of your lease.

Sales Tax

Sales tax is usually capitalized and added to the monthly payments. However, some dealers choose not to include it in their calculations to drive the advertised lease payments even lower. What they do instead is state in the small print that the monthly payment excludes "sales tax". Make sure you carefully read the fine print for any extra, hidden costs not included in the advertised monthly payment. Unscrupulous fees that typically slip through the cracks include sales tax, registration and title fees.

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Independent Car Lease Companies

To lease, you have two possible choices: either lease through a dealer%u2019s finance source or through an independent lease company.

A conventional dealer has a captive finance source, which can be the car manufacturer's financial company, such as BMW Financial Services, Honda Motor Credit or General Motors Acceptance Corporation (G MAC), or a major national bank such as Chase Manhattan. Independent lease companies are no financial obligation to any single one manufacturer financing source, but work with dealers anywhere in the country.

So which one is better?

Conventional dealers provide better lease-deals on limited-time promotions. Factory-subsidized cars that have subverted money factors and residuals are very attractive lease deals and can be very hard to beat anywhere else. Independent lease companies can offer you unbiased and professional advice on vehicle selection regardless of make and model. This is because they are not tied to a single manufacturer or financing source, unlike conventional dealers who have to sell specific models. They can also be more flexible regarding negotiating lease terms like residual value and mileage. Ultimately, if you prefer a more personal and customer-oriented relationship with your leasing agent, then you will do well with an independent leasing company.

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Go Green And Save On Your Lease

Hybrid vehicles' popularity has sharply grown from a couple of thousands in early 2000 to millions of hybrid cars all over the world.

The trend is rapidly catching with the auto-leasing industry with generous tax credits and incentives on offer if you to go green. businesses and taxpayers who lease, or purchase, an environmentally-friendly and fuel-efficient vehicle are eligible to claim federal income tax credits worth thousands of dollars. Individual states also offer generous incentives, including hybrid state tax credits, new High-Occupancy Vehicle (HOV) lanes access and discounted thruway tolls for alternative-fueled vehicles. And that's not all you can save from going green! You can now save on your parking fees at a number of universities and some auto-insurance companies are offering insurance discounts for hybrid-vehicle owners in the united states.

If you want to take advantage of these incentives and contribute to energy conservation then visit HybridCenter.org and complete a personal profile about your driving needs and habits. You will get in-depth advice on hybrid models that would make economic sense to you and
local, state and federal incentives available where you live.

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