Edmunds car lease deals
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Some you can negotiate, others are set by the lender, and others are up to you. However, these four figures have the biggest impact on your monthly payment:. Sale price of the car: For an estimate, look up the current market value of the car on one of the pricing guides, such as Edmunds. You can convert an interest rate to a decimal by dividing it by 2, Conversely, you can convert a lease factor to an interest rate by multiplying it by 2, The interest rate you get in a lease contract is based on your credit score.
The rate you get is based on your credit score.
Different lenders leasing companies will offer different interest rates. Length of the lease: Car leases usually last 36 months, which is how long most extended warranties last.
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However, you can find leases for only 24 months and even 38 or 40 months. You could be on the hook for more service costs, buying new tires and costly repairs.
A leasing contract is finite. Once it ends, you'll be in the market for a new car again, and you won't have to worry about selling or trading in the old one, since disposal will be as simple as turning the car over to the leasing company. This makes leasing a good choice for those who plan to frequently upgrade to the newest model. The key disadvantage to leasing is that it doesn't confer ownership, and a lack of ownership places restrictions on what you can do with the vehicle.
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For example, if you have dreams of customizing your car with aftermarket options, leasing isn't for you, since the terms of a typical car lease don't allow those changes. Leasing contracts also have mileage limits, and most contracts allow 12, miles per year. If you exceed this, you'll have to pay extra, and this usually runs about 10 to 15 cents per mile. If you put lots of miles on your car each year via road trips or a long work commute, leasing may not be ideal.
Five Steps to Getting the Best Deal on a Car Lease
Leasing also requires that the vehicle be well maintained. If there is damage or wear and tear, you'll have to pay a penalty. With leasing, you never own your car, which means you never build equity in the vehicle you're driving, and you never stop making payments. Though leasing will cost you less each month than making loan payments for a purchase, keep in mind the cumulative cost of leasing for several years could easily exceed the cost of buying a new vehicle. Leases also commonly require extra charges called acquisition and disposition fees.
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You should pay one or the other, but not both. If you've analyzed this information and decided leasing makes sense for you, it's time to move on to the next step. Set the terms of your lease. When setting up a lease, you'll have to decide how much of a down payment you want to make, if any. You'll need to determine the span of the lease contract. You'll also need to decide how much you want to pay each month.
Down payments aren't required for car leases, and we'd recommend you not make one.
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The reason behind this recommendation is this: If your vehicle is stolen or totaled, you may lose your down payment. In the event of theft or a total loss, insurance companies reimburse you for the actual market value of the car, and that takes a hit the minute you drive off the lot.
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According to statistics published by Edmunds, a company providing automotive data, new cars depreciate by an average of 19 percent in the first year of ownership. Guaranteed auto protection GAP insurance is required by most lease contracts, and it can help cover the difference between the car's market value and the amount owed to the leasing company if the car is written off or stolen. However, keep in mind that even with GAP insurance, there may be limits to the amount of protection provided.
With Premier Car Leasing the price you see is the price you pay with no added fees guaranteed. Alex Bernstein , Senior Pricing Analyst. If you've been hankering to step up to a luxury model but haven't been able to swing it financially, you may find these models more affordable through a lease. Down payments aren't required for car leases, and we'd recommend you not make one. Remember to consider all your automotive expenses when planning your budget, including insurance.
Your best bet is to minimize your risk by minimizing your down payment. It's also important to remember a key advantage of leasing is it frees up your cash flow by providing you with expenses that are more manageable than those associated with buying a car. If you shell out lots of money for a big down payment, this will negate this advantage. As far as the span of the lease contract is concerned, we'd recommend having your lease agreement not extend beyond the length of the basic warranty offered by the manufacturer. This helps you avoid having to pay for repairs on a car you don't own.
Go to the dealer and negotiate the sale price downward, just as you would when buying a car.
Always offer a specific number, rather than asking them what they can do for you. Discover the money factor.
How to Get a Great Deal on a Car Lease
The money factor is usually in decimal form, often with four or five decimal places. Dealers use it to calculate the interest rate to be applied to the negotiated retail price — the annual percentage rate APR. To increase interest charges for lessees above what they pay lenders to finance the car, dealers simply jack up the money factor. How can you learn the money factor? Simply ask the dealer. Once you get the number often abbreviated on lease documents as MF , just multiply it times 2, — an industry financing constant — to get the APR.
For example, if the money factor is.