Perhaps you have been considering getting a new car lease rather than a traditional car loan. But before you do this, make sure that you know how car leasing actually works and the reliability of the dealer you are going to lease a car from.

Leasing a new car is a rental contract for the long term with an option to let you purchase in the end. The lease payment every month is based on the cap reduction or down payment, the negotiated vehicle price, the length of lease, the residual value and finance rate or money factor. Any of such items can decrease how much you will have to pay every month. Just be aware that a purchase lease price means higher lease payments. If you are a smart car lessee, you would want to negotiate a bigger discount off the offered purchase price. Negotiate only with reputed car leasing companies like Andy1st Driving School.

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Wise Leasing Practices

  • You should not lease a car longer than 36 months. You would want to save yourself from paying repairs on the car you leased, thus, ensure the full lease term is covered by the warranty.
  • Compare leases on similar vehicles at various dealers and add the cap reduction to the monthly lease payments. The lease that has the lowest total is the best deal.
  • Don’t be fooled by lower payment tricks. Usually, dealers will make use of large cap reduction so you will end up thinking you get a great deal. A cap reduction is just an advance monthly payment and certainly not a refundable deposit.
  • Negotiate everything. Everything can be negotiated including the money factor and the purchase price.

Wise Leasing Practices

Tips to Save Money

In order to get the best deal possible on a new vehicle, conduct research before you put any down payment or sign any contract. Dealers tricks like packed payments and secret APR can erase any savings or discounts you can get so make sure that you know how to calculate the lease amount you will have to pay every month. Obtain at least five to six quotes in the internet before you begin negotiating with some dealers. Also, you will have to get price if you wish to lease a car s as the price will be used for calculating the payment every month and cap reduction.

Tips to Save Money

Down Payment Don’ts

Usually, down payments are required on vehicle leases so a bad deal will become a good one. Avoid getting fooled by this. A lease down payment is an advance to the monthly payment. In leasing, the residual is not affected by down payments. In fact, down payments will not also let you build equity as they only reduce the monthly payment. For instance, an advertised 30-month car lease for $299 per month based on a down payment of $1800 is the same as a lease worth $259 per month without down payment. Make sure that all lease are analyzed based on no cap reduction or zero down payment and know how to figure out your payments to avoid getting ripped off.

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Author Bio: David Hart is a know blogger and content writer that focus on the finance niche. However, he has also written a number of articles related to automotive including tips in finding reliable car leasing companies like Andy1st driving school.

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